Mentor Graphics Reports Fiscal Third Quarter Results

Mentor Graphics Corporation (NASDAQ: MENT) today announced financial results for the company's fiscal third quarter ended October 31, 2016. The company reported revenues of $322.5 million, GAAP earnings per share of $0.37 and non-GAAP earnings per share of $0.50.

Fiscal Third Quarter Performance
  • Book to bill was a record for a third quarter and solidly above 1.0 for the second consecutive quarter.
  • Annualized fee growth for top 10 renewals was 60 percent overall with fees from systems customers growing over 160 percent and those from integrated circuit (IC) customers growing 35 percent.
  • Average term length for renewals in the top 10 deals was 3.1 years.
  • Emulation product revenue, up 100 percent year over year, included 4 new customers for the second consecutive quarter.
  • GAAP gross margin was 84.1 percent. Non-GAAP gross margin of 84.9 percent is the highest for a Q3 in the last five years and 340 basis points higher than last quarter.
  • GAAP operating expenses were $215 million. Non-GAAP operating expenses of $202 million were on guidance and flat year over year.

"Mentor's third quarter results solidly exceeded revenue and earnings-per-share guidance," said Walden C. Rhines, chairman and CEO of Mentor Graphics. "Book to bill was significantly above one with strength in both semiconductor and system accounts. Growth of the annual run-rate in our top 10 customers was a strong 60 percent in the third fiscal quarter. After quarter end, on November 14, we announced an agreement whereby Siemens will acquire Mentor Graphics. Joining forces with Siemens will enable Mentor to achieve the next level of success for our customers and employees."

During the quarter Mentor Graphics acquired Galaxy Semiconductor, a leading provider of test data analysis and defect reduction software for the semiconductor industry. The company further extended its offerings within the Calibre® and Analog FastSPICE (AFS™) platforms to support TSMC 7 nm and 16 FFC FinFET process technologies. Mentor received two Partner of the Year Awards from TSMC for joint delivery of the 7 nm mobile design platform and the Integrated Fan-Out (INFO) design solution.

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