Q3 2012 Earnings Call
August 22, 2012 5:00 pm ET
Aart J. de Geus - Co-Founder, Chairman and Co-Chief Executive Officer
Brian M. Beattie - Chief Financial Officer
Richard Valera - Needham & Company, LLC, Research Division
Raj Seth - Cowen and Company, LLC, Research Division
Sterling P. Auty - JP Morgan Chase & Co, Research Division
Thomas Yeh - BofA Merrill Lynch, Research Division
Thomas Diffely - D.A. Davidson & Co., Research Division
Mahesh Sanganeria - RBC Capital Markets, LLC, Research Division
Jay Vleeschhouwer - Griffin Securities, Inc., Research Division
Previous Statements by SNPS
» Synopsys Management Discusses Q2 2012 Results - Earnings Call Transcript
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Ladies and gentlemen, thank you very much for standing by, and welcome to the Synopsys Earnings Conference Call for the Third Quarter of Fiscal Year 2012. [Operator Instructions] Today's call will last 1 hour. Five minutes prior to the end of the call, we will announce the amount of time remaining in the conference. As a reminder, today's conference 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.
Thank you, Dave. Good afternoon, everyone. With us on the call today are Aart de Geus, Chairman and co-CEO of Synopsys; and Brian Beattie, Chief Financial Officer.
Before we begin our remarks this afternoon, I'd like to remind everyone that during the course of this conference call, Synopsys will discuss plans, forecasts and targets and will make other forward-looking statements regarding the company, its business and its financial results. While these statements represent our best current judgment about future results and performance as of today, our actual results and performance are subject to many risks and uncertainties that could cause actual results to differ materially from what we expect.
In addition to any risks that we highlight during the call, important factors that may affect our future results are described in our most recent quarterly report on Form 10-Q and today's earnings press release. All financial information to be discussed on this conference call, the reconciliation of the non-GAAP financial measures to their most directly comparable GAAP financial measures and supplemental financial information can be found in the 8-K, the earnings press release and the financial supplement that we released today. All of these items are currently available on our website at www.synopsys.com.
With that, I'll turn the call over to Aart de Geus.
Aart J. de Geus
Good afternoon, and thank you for joining us. Today, I'm pleased to report excellent Q3 results, an increase in non-GAAP earnings and cash flow guidance for the full year, an excellent progress on our product roadmap and acquisitions integration. Let me begin with the summary of our results.
Our business in Q3 was strong, with revenue of $444 million, non-GAAP earnings per share of $0.55 and excellent operating cash flow. For the year, we are raising the mid-point of our non-GAAP EPS outlook by $0.05 to a range of $2.09 to $2.11. We're also raising our operating cash flow outlook to approximately $450 million, and we reiterate our target of high single-digit non-GAAP EPS growth for 2013. Brian will provide more financial detail for the current quarter and year in just a moment.
Let me briefly comment on the current landscape. Looking at our overall business, we see our customers continued to drive design as aggressively as they can. Even in the context of an uncertain economy, they are focused on accelerating the innovation required to stay competitive. In this context, EDA and IP are increasing in importance, enabling designers to achieve the necessary power, performance and cost specs of each wave of new products within the tight schedules dictated by challenging end markets.
Synopsys is at the forefront of this design wave. Our financial strength has enabled us to invest in innovation and global support consistently over many years. Our technically deep and complete solutions are hard to beat in benchmarks, and our corporate stability makes us an ideal partner in any phase of the business cycle. So regardless of fluctuations in the overall economy, we expect Synopsys to continue to do very well.
From the perspective of our customers, we continue to see rapid migration to ever more advanced technology nodes, an area in which Synopsys is particularly well qualified. Migration to the very advanced 20-nanometer node is progressing rapidly as we now track approximately 80 active 20-nanometer designs. We're also supporting intense efforts in the development of FinFETs, which are the fundamentally new vertical transistors that are needed to keep Moore's Law on track.
Here, Synopsys is at the forefront through our TCAD offering, which is used to do 3-dimensional simulations of these new devices. Our latest IC Validator physical verification solution also supports emerging FinFET requirements and is already demonstrating success with customers. Leading-edge customers such as Samsung and STMicroelectronics have been taping out 20-nanometer designs using our solutions for more than 2 years now. At this summer's Design Automation Conference, ST, GLOBALFOUNDRIES, Samsung and Oracle highlighted remarkable 20-nanometer design successes using IC Compiler.
Moving to 28- and 32-nanometers, which we consider the mainstream leading-edge node, we're seeing rapidly broadening adoption. While the designs are complex, the design rules are now stable, and recent yield progress has improved the availability of manufacturing capacity. Approximately 80% of 20- and 28-nanometer designs use Synopsys physical design and approximately 70% use Synopsys verification.
To achieve this, 20-nanometer alignment with foundries and with ecosystem partners such as ARM, GLOBALFOUNDRIES and Samsung are vital. At DAC, these 3 partners described our excellent collaboration with Synopsys as essential to help mutual customers address leading-edge challenges.