益華電腦 (CDNS) 2023 Q4 法說會逐字稿

Good afternoon. My name is Briana, and I will be your conference operator today. At this time, I would like to welcome everyone to the Cadence Fourth Quarter and Fiscal Year 2023 Earnings Conference. (Operator Instructions) Thank you.

午安.我叫 Briana，今天我將擔任你們的會議操作員。此時，我謹歡迎大家參加Cadence第四季及2023財年財報會議。 （操作員說明）謝謝。

I will now turn the call over to Richard Gu, Vice President of Investor Relations for Cadence. Please go ahead, sir.

我現在將電話轉給 Cadence 投資者關係副總裁 Richard Gu。請繼續，先生。

Thank you, operator. I'd like to welcome everyone to our fourth quarter of 2023 earnings conference call. I'm joined today by Anirudh Devgan, President and Chief Executive Officer; and John Wall, Senior Vice President and Chief Financial Officer. The webcast of this call and a copy of today's prepared remarks will be available on our website, cadence.com.

謝謝你，接線生。歡迎大家參加我們的 2023 年第四季財報電話會議。今天與我一起出席的還有總裁兼執行長 Anirudh Devgan；約翰‧沃爾 (John Wall)，資深副總裁兼財務長。本次電話會議的網路直播和今天準備好的演講副本將在我們的網站 cadence.com 上提供。

Today's discussion will contain forward-looking statements, including our outlook on future business and operating results. Due to risks and uncertainties actual results may differ materially from those projected or implied in today's discussion. For information on factors that could cause actual results to differ, please refer to our SEC filings, including our most recent Forms 10-K and 10-Q, CFO commentary and today's earnings release. All forward-looking statements during this call are based on estimates and information available to us as of today, and we disclaim any obligation to update them.

今天的討論將包含前瞻性陳述，包括我們對未來業務和經營績效的展望。由於風險和不確定性，實際結果可能與今天討論中預測或暗示的結果有重大差異。有關可能導致實際結果不同的因素的信息，請參閱我們向 SEC 提交的文件，包括我們最新的 10-K 和 10-Q 表格、首席財務官評論和今天的收益發布。本次電話會議期間的所有前瞻性陳述均基於我們今天掌握的估計和信息，我們不承擔任何更新這些陳述的義務。

In addition, we will present certain non-GAAP measures, which should not be considered in isolation from or as a substitute for GAAP results. Reconciliation of GAAP to non-GAAP measures are included in today's earnings release. (Operator Instructions)

此外，我們將提出某些非 GAAP 衡量標準，這些衡量標準不應孤立於 GAAP 結果之外，也不應被視為 GAAP 結果的替代品。在今天的收益發布中包含了 GAAP 與非 GAAP 指標的調整。 （操作員說明）

Now I'll turn the call over to Anirudh.

現在我將把電話轉給阿尼魯德。

Thank you, Richard. Good afternoon, everyone, and thank you for joining us today. I'm pleased to report that Cadence delivered an outstanding Q4, wrapping up a record 2023, achieving 15% revenue growth, 42% non-GAAP operating margin, and over 20% non-GAAP EPS growth for the year. We exited 2023 with a record backlog of $6 billion as customers increasingly committed to our chip to system integrated design and analysis platforms. We expect our innovative solutions to continue driving broad-based business momentum in 2024. John will provide more details in a moment.

謝謝你，理查。大家下午好，感謝您今天加入我們。我很高興地向大家報告，Cadence 第四季度業績出色，創下了2023 年的業績記錄，實現了15% 的收入增長、42% 的非GAAP 營業利潤率以及超過20% 的非GAAP 每股收益增長。隨著客戶越來越致力於我們的晶片到系統整合設計和分析平台，我們在 2023 年結束時積壓了創紀錄的 60 億美元。我們預計我們的創新解決方案將在 2024 年繼續推動廣泛的業務發展勢頭。約翰稍後將提供更多詳細資訊。

Secular trends of digital transformation, hyperscale computing and autonomous driving all bolstered by an AI super cycle, continue to fuel strong broad-based design activity. We continue successfully executing to our Intelligent System Design strategy that triples our TAM opportunity while greatly expanding our portfolio. Our innovative engine delivered several significant products, including most recently, the revolutionary Millennium M1 platform. The industry's first accelerated multiphysics supercomputing platform. The platform tightly integrates our Fidelity CFD Software with high-performance GPUs and combines AI, HPC and digital twin technology to deliver an unprecedented 20x energy efficiency and up to 100x design impact.

數位轉型、超大規模運算和自動駕駛的長期趨勢都受到人工智慧超級週期的推動，繼續推動強大的廣泛設計活動。我們繼續成功執行我們的智慧系統設計策略，使我們的 TAM 機會增加兩倍，同時大幅擴展我們的產品組合。我們的創新引擎交付了多種重要產品，包括最近的革命性 Millennium M1 平台。業界第一個加速多物理場超級運算平台。該平台將我們的 Fidelity CFD 軟體與高效能 GPU 緊密整合，並結合了 AI、HPC 和數位孿生技術，可提供前所未有的 20 倍能源效率和高達 100 倍的設計影響。

We were honored to have customers, including Honda, Boeing and GE as speakers at our launch event. We substantially grew our footprint at market-shaping customers and expanded our relationships with key ecosystem partners. We further our partnership with Intel Foundry through a strategic multiyear agreement on providing design software and leading IP at multiple Intel advanced nodes, thereby advancing Intel's IDM 2.0 strategy and accelerating mutual customer success. Cadence is at the forefront of the AI revolution, closely partnering with marquee companies on their trailblazing AI design for training and inference from cloud to the edge.

我們很榮幸邀請到本田、波音和通用電氣等客戶在我們的發表會上發表演講。我們大幅擴大了在市場塑造客戶中的影響力，並擴大了與主要生態系統合作夥伴的關係。我們透過多年戰略協議進一步深化了與英特爾代工廠的合作夥伴關係，該協議在多個英特爾先進節點提供設計軟體和領先的 IP，從而推進英特爾的 IDM 2.0 戰略並加速客戶的共同成功。 Cadence 處於人工智慧革命的前沿，與知名公司密切合作，開發從雲端到邊緣的訓練和推理的開創性人工智慧設計。

NVIDIA and Cadence have collaborated closely over several years. And in Q4, we deepened our partnership through a meaningful expansion of our hardware solutions and EDA software. Earlier in the quarter, we announced our work on Cadence.AI with NVIDIA's NeMo Retriever. And now we are thrilled to deepen our partnership and extend it to the new Millennium, multiphysics supercomputer and SaaS solution, which is co-optimized with NVIDIA's accelerated computing and AI platform.

NVIDIA 和 Cadence 多年來一直密切合作。在第四季度，我們透過有意義地擴展我們的硬體解決方案和 EDA 軟體，加深了我們的合作夥伴關係。本季度早些時候，我們宣布了與 NVIDIA 的 NeMo Retriever 合作開發 Cadence.AI。現在，我們很高興能夠深化我們的合作夥伴關係，並將其擴展到新的 Millennium、多物理場超級電腦和 SaaS 解決方案，該解決方案與 NVIDIA 的加速運算和 AI 平台共同優化。

And as the exclusive EDA partner of Arm Total Design, Cadence and Arm are closely collaborating to accelerate the development of custom SoCs, based on the Neoverse Compute Subsystem.

作為 Arm Total Design 的獨家 EDA 合作夥伴，Cadence 和 Arm 密切合作，加速基於 Neoverse 計算子系統的客製化 SoC 的開發。

Over the year, we have continued building out our generated Cadence.AI portfolio. The industry's broadest AI offering spanning chip, to board, to system and delivering exceptional optimization and productivity benefits. Earlier in Q2, we introduced Virtuoso Studio, an Allegro X AI bringing AI to custom analog and PCB designs. And in Q4, we added Voltus InsightAI for automatically addressing voltage drop violations. We also pioneered bringing LLM capabilities to chip design, successfully helping Renesas accelerate functional specification to final design. Accelerating momentum of our Cadence.AI portfolio has led to an almost tenfold increase in the number of customers adopting our Gen AI solutions in 2023, as customers embrace the technology to develop optimized products much more efficiently.

在這一年裡，我們繼續建立我們產生的 Cadence.AI 產品組合。業界最廣泛的人工智慧產品涵蓋晶片、電路板、系統，並提供卓越的最佳化和生產力優勢。在第二季早些時候，我們推出了 Virtuoso Studio，這是一款 Allegro X AI，將 AI 引入客製化模擬和 PCB 設計。在第四季度，我們添加了 Voltus InsightAI，用於自動解決電壓降違規問題。我們也率先將法學碩士 (LLM) 能力引入晶片設計，成功幫助瑞薩電子加速功能規範到最終設計。隨著客戶採用該技術來更有效地開發優化產品，我們的 Cadence.AI 產品組合的加速發展勢頭使得採用我們的 Gen AI 解決方案的客戶數量在 2023 年增加了近十倍。

Now let's talk about some of the product highlights for Q4 and 2023. Rising system complexity and challenges stemming from the growing hyper-convergences of the electrical, mechanical and physical worlds, are driving the need for a seamless platform solution across design, packaging, simulation and analysis. We made this a core tenet of our Intelligent System Design growth strategy 6 years ago and our System Design & Analysis business continued its strong momentum delivering 18% year-over-year growth in Q4 and 22% growth for the year.

現在讓我們來談談第四季度和2023 年的一些產品亮點。電氣、機械和物理世界日益增長的超融合帶來的不斷上升的系統複雜性和挑戰，正在推動對跨設計、封裝和模擬的無縫平台解決方案的需求與分析。 6 年前，我們將此作為智慧系統設計成長策略的核心原則，我們的系統設計與分析業務持續保持強勁勢頭，第四季年增 18%，全年成長 22%。

PCB and advanced packaging are linchpin technologies that sit at the crucial intersection of mechanical and electrical domains and Cadence's rich heritage in these areas remain a key strategic differentiator, especially in the emerging chiplet era. We continue advancing these technologies with Allegro X AI providing greater than 10x acceleration in PCB design and endorsed by Schneider Electric and Kioxia at its launch. Our multiphysics analysis portfolio couples our expertise in physics-based modeling with AI-driven optimization and is delivering superior results to customers across multiple vertical segments, especially aerospace and defense and automotive.

PCB 和先進封裝是機械和電氣領域關鍵交叉點的關鍵技術，Cadence 在這些領域的豐富傳統仍然是關鍵的策略差異化因素，尤其是在新興的小晶片時代。我們透過 Allegro X AI 繼續推進這些技術，為 PCB 設計提供超過 10 倍的加速，並在推出時得到施耐德電機和 Kioxia 的認可。我們的多物理場分析產品組合將我們在基於物理的建模方面的專業知識與人工智慧驅動的優化相結合，為多個垂直領域的客戶提供卓越的結果，特別是航空航天、國防和汽車。

Recently, we launched Celsius Studios, the industry's first complete AI thermal design and analysis solutions for electronic systems, delivering up to a 10x performance benefit over legacy systems with endorsement by Samsung and BAE Systems. And Wistron, a leading technical services provider use optimality AI-driven optimization technology and Clarity for fast, accurate electromigration in design analysis, improving design reliability while realizing a 2x improvement in turnaround time.

最近，我們推出了Celsius Studios，這是業界第一個針對電子系統的完整人工智慧熱設計和分析解決方案，在三星和BAE Systems的認可下，其性能比傳統系統提高了10倍。領先的技術服務供應商緯創資通利用 AI 驅動的優化技術和 Clarity 在設計分析中實現快速、準確的電遷移，提高設計可靠性，同時實現週轉時間縮短 2 倍。

Our digital IC business finished another strong year with 22% revenue growth in Q4, as our solutions continued gaining share at market-shaping customers, especially at the most advanced nodes. Our digital software is proliferating in all top 20 semiconductor companies and our digital full flow was adopted by 34 additional customers during the year. We are very pleased with the accelerating momentum of our flagship Cadence Cerebrus Gen AI solution, whose transformative PPA and productivity benefits have led to its deployment in all our top 10 digital customers and used in well over 300 tape-outs.

我們的數位 IC 業務又迎來了強勁的一年，第四季度收入成長了 22%，因為我們的解決方案在市場塑造客戶中的份額不斷增加，尤其是在最先進的節點。我們的數位軟體在所有排名前 20 的半導體公司中激增，並且我們的數位全流程在這一年被另外 34 家客戶採用。我們對我們的旗艦Cadence Cerebrus Gen AI 解決方案的加速發展勢頭感到非常高興，該解決方案具有變革性的PPA 和生產力優勢，已在我們所有排名前10 的數位客戶中進行部署，並用於超過300 個流片。

In Q4, Cadence Cerebrus run rate more than quadrupled at several market-shaping customers, and it also drove significant digital full flow expansions at 2 top-tier semi customers. Our Integrity 3D-IC Platform is the industry's only unified 3D-IC design and analysis platform and ties our best-in-class SoC and package design technologies with system-level planning and analysis. In Q4, GUC successfully used integrity to tape-out a complex 3D stacked die design, with a wafer-on-wafer structure on an advanced FinFET node.

第四季度，Cadence Cerebrus 在多個市場塑造客戶中的運作率增加了四倍多，並且還推動了 2 個頂級半客戶的數位全流程顯著擴展。我們的 Integrity 3D-IC 平台是業界唯一的統一 3D-IC 設計和分析平台，它將我們一流的 SoC 和封裝設計技術與系統級規劃和分析結合起來。在第四季度，GUC 成功利用完整性來流片複雜的 3D 堆疊晶片設計，並在先進的 FinFET 節點上採用晶圓對晶圓結構。

Next, I will talk about our Functional Verification business, which had another remarkable year. delivering 11% year-over-year revenue growth in Q4 and 22% growth for the full year. Escalating system and software bring-up challenges along with pressing need for first-pass silicon success continued driving strong demand for our functional verification solutions. Our best-in-class dynamic duo of Palladium Z2 and Protium X2 platform delivered another record year with strong momentum across AI, hyperscale, auto and mobile.

接下來，我將談談我們的功能驗證業務，這一年又是輝煌的一年。第四季營收年增 11%，全年營收成長 22%。不斷升級的系統和軟體帶來的挑戰以及對一次晶片成功的迫切需求繼續推動對我們的功能驗證解決方案的強勁需求。我們一流的 Palladium Z2 和 Protium X2 平台動態組合再創歷史新高，在人工智慧、超大規模、汽車和行動領域表現強勁。

Virtually all of the top hyperscalers are Palladium customers, and the majority of them are also dynamic duo customers. Last month, we announced a new set of Palladium Z2 applications that included the industry's first 4 state emulation and mixed-signal modeling capabilities that will significantly accelerate SoC verification, marquee customers, including NVIDIA and Samsung supported the announcement.

事實上，所有頂級超大規模供應商都是 Palladium 客戶，其中大多數也是動態的 duo 客戶。上個月，我們發布了一套新的Palladium Z2 應用程序，其中包括業界首個4 狀態模擬和混合訊號建模功能，將顯著加速SoC 驗證，包括NVIDIA 和三星在內的大客戶支援了這一發布。

Our hardware family added 26 new and over 110 repeat customers during the year with the top 3 deals being with a global marquee system company, the leading AI system company, and the leading communication services company. Demand for the Dual have greatly exceeded our expectations when more than 2/3 of the orders in the year, including both platforms. Our custom IC Virtuoso inspective franchise solutions tackle the most complex challenges in analog, mixed signal, RF design and circuit simulation and are increasingly crucial for our customers. Building on our market leadership, our custom IC revenue grew 16% year-over-year in Q4.

我們的硬體系列在這一年增加了 26 個新客戶和 110 多個回頭客，其中排名前 3 的交易分別是與一家全球招牌系統公司、領先的人工智慧系統公司和領先的通訊服務公司。 Dual 的需求大大超出了我們的預期，超過了當年訂單的 2/3，包括兩個平台。我們的客製化 IC Virtuoso 檢查特許經營解決方案可解決類比、混合訊號、射頻設計和電路模擬最複雜的挑戰，這對我們的客戶來說越來越重要。憑藉我們的市場領導地位，我們的客製化 IC 收入在第四季度同比增長 16%。

Customer interest in our recently announced Virtuoso Studio is strong with over 2,000 downloads so far and adoption of our newer Spectre platform products continues to ramp. Virtuoso had a major win with a top global memory company, which replaced its internal tools with our technology. Our IP business drove a strong finish to the year, growing 36% year-over-year in Q4. We continue to sharpen our Star IP strategy with a targeted acquisition such as Rambus PHY IP and Invecas to capture market opportunities offered by AI and heterogeneous integration. Customer interest in the Rambus PHY assets, especially HBM and GDDR IP have been extremely positive, which have already been instrumental in closing some strategic deals. Our Invecas acquisition is also highly synergistic to the strategy, adding a skilled engineering team with expertise in delivering custom solutions across design, product engineering, advanced packaging and embedded software.

客戶對我們最近推出的 Virtuoso Studio 表現出濃厚的興趣，迄今為止下載量已超過 2,000 次，而且我們較新的 Spectre 平台產品的採用率也在增加。 Virtuoso 與一家全球頂級記憶體公司取得了重大勝利，該公司用我們的技術取代了其內部工具。我們的 IP 業務在今年取得了強勁的業績，第四季年增 36%。我們透過有針對性的收購（例如 Rambus PHY IP 和 Invecas）繼續強化我們的明星 IP 策略，以抓住人工智慧和異質整合提供的市場機會。客戶對 Rambus PHY 資產（尤其是 HBM 和 GDDR IP）的興趣非常積極，這已經有助於完成一些策略交易。我們對 Invecas 的收購也與該策略高度協同，增加了一支技術精湛的工程團隊，他們在設計、產品工程、先進封裝和嵌入式軟體方面擁有提供客製化解決方案的專業知識。

In closing, we are pleased with our outstanding performance in 2023 and are excited by the business momentum and market opportunities in 2024. Now I will turn it over to John to provide more details on the Q4 results and our 2024 outlook.

最後，我們對 2023 年的出色表現感到滿意，並對 2024 年的業務勢頭和市場機會感到興奮。現在我將把它交給 John，提供有關第四季度業績和 2024 年展望的更多詳細信息。

Thanks, Anirudh, and good afternoon, everyone. I'm pleased to report that Cadence delivered a strong Q4 and 2023, driven by growth across all of our businesses. Robust design activity and customer demand coupled with our strong execution helped us to achieve revenue growth of 15% and EPS growth of over 20% for the year. Fourth quarter bookings were strong, and I'm pleased that we achieved record backlog and record current remaining performance obligation levels, finishing the year with approximately $6.0 billion in backlog and at approximately $3.2 billion in cRPO.

謝謝阿尼魯德，大家午安。我很高興地報告，在我們所有業務成長的推動下，Cadence 在第四季度和 2023 年實現了強勁的業績。強勁的設計活動和客戶需求，加上我們強大的執行力，幫助我們實現了全年 15% 的收入成長和超過 20% 的每股盈餘成長。第四季的預訂量強勁，我很高興我們實現了創紀錄的積壓訂單和創紀錄的當前剩餘履約義務水平，年底時積壓訂單約為 60 億美元，cRPO 約為 32 億美元。

Here are some of the financial highlights from the fourth quarter and the year, starting with the P&L. Total revenue was $1.069 billion for the quarter, and $4.090 billion for the year. GAAP operating margin was 31.5% for the quarter and 30.6% for the year. Non-GAAP operating margin was 42.9% for the quarter and 42.0% for the year. GAAP EPS was $1.19 for the quarter and $3.82 for the year. Non-GAAP EPS was $1.38 for the quarter and $5.15 for the year.

以下是第四季和今年的一些財務亮點，從損益表開始。該季度總收入為 10.69 億美元，全年總收入為 40.90 億美元。本季 GAAP 營運利潤率為 31.5%，全年營運利潤率為 30.6%。非 GAAP 本季營運利潤率為 42.9%，全年營運利潤率為 42.0%。該季度的 GAAP 每股收益為 1.19 美元，全年的 GAAP 每股收益為 3.82 美元。非 GAAP 本季每股收益為 1.38 美元，全年每股收益為 5.15 美元。

Next, turning to the balance sheet and cash flow. Our cash balance was $1.8 billion at year-end, while the principal value of debt outstanding was $650 million. Operating cash flow in the fourth quarter was $272 million and $1.35 billion for the full year. DSOs were 43 days, and we used $700 million to repurchase Cadence shares during the year.

接下來，轉向資產負債表和現金流量。截至年底，我們的現金餘額為 18 億美元，而未償債務本金為 6.5 億美元。第四季營運現金流為 2.72 億美元，全年營運現金流為 13.5 億美元。 DSO 為期 43 天，這一年我們花了 7 億美元回購了 Cadence 股票。

Before I provide our outlook for Q1 and 2024, I'd like to share some assumptions that are embedded in our outlook. In 2023, our upfront revenue mix increased to approximately 16%, largely due to strong hardware demand. In 2024, we expect another record hardware revenue year and strong IP growth. And as a result, at the midpoint, our outlook assumes that our upfront revenue mix for the year will increase to approximately 17.5%.

在提供第一季和 2024 年的展望之前，我想先分享我們展望中的一些假設。 2023 年，我們的前期收入組合增加到約 16%，這主要是由於強勁的硬體需求。到 2024 年，我們預計硬體收入將再創歷史新高，智慧財產權將強勁成長。因此，在中點，我們的前景假設我們今年的前期收入組合將增加至約 17.5%。

In Q1 2023, our upfront revenue mix was approximately 20%, largely due to our effort to improve hardware delivery lead times at the start of last year. In Q1 2024, at the midpoint, our outlook assumes an upfront revenue mix of approximately 14%. Our non-GAAP EPS outlook is based on a tax rate of 16.5%. And finally, our outlook for Q1 and 2024 is based on our usual assumption that export control regulations in place today remain substantially similar for the remainder of the year.

2023 年第一季度，我們的前期收入組合約為 20%，這主要歸功於我們去年初努力縮短硬體交付週期。在 2024 年第一季的中點，我們的預期假設前期收入組合約為 14%。我們的非 GAAP 每股盈餘預期是基於 16.5% 的稅率。最後，我們對第一季和 2024 年的展望是基於我們通常的假設，即今天實施的出口管制法規在今年剩餘時間內保持基本相似。

In our outlook for 2024, we expect revenue in the range of $4.55 billion to $4.61 billion. GAAP operating margin in the range of 32% to 33%; non-GAAP operating margin in the range of 42% to 43%, GAAP EPS in the range of $4.08 to $4.18; non-GAAP EPS in the range of $5.87 to $5.97. Operating cash flow in the range of $1.35 billion to $1.45 billion, and we expect to use approximately 50% of our free cash flow to repurchase Cadence shares in 2024.

在我們對 2024 年的展望中，我們預期營收在 45.5 億美元至 46.1 億美元之間。 GAAP 營業利潤率介於 32% 至 33% 之間；非 GAAP 營業利潤率為 42% 至 43%，GAAP 每股收益為 4.08 美元至 4.18 美元；非 GAAP 每股收益在 5.87 美元至 5.97 美元之間。營運現金流在 13.5 億美元至 14.5 億美元之間，我們預計在 2024 年將使用約 50% 的自由現金流來回購 Cadence 股票。

For Q1, we expect revenue in the range of $990 million to $1.01 billion, GAAP operating margin in the range of 24.5% to 25.5%. Non-GAAP operating margin in the range of 36.5% to 37.5%. GAAP EPS in the range of $0.74 to $0.78, and non-GAAP EPS in the range of $1.10 to $1.14. And as usual, we published a CFO commentary document on our Investor Relations website, which includes our outlook for additional items as well as further analysis and GAAP to non-GAAP reconciliations.

對於第一季，我們預計營收在 9.9 億美元至 10.1 億美元之間，GAAP 營業利潤率在 24.5% 至 25.5% 之間。非 GAAP 營運利潤率在 36.5% 至 37.5% 之間。 GAAP 每股收益為 0.74 美元至 0.78 美元，非 GAAP 每股收益為 1.10 美元至 1.14 美元。與往常一樣，我們在投資者關係網站上發布了一份首席財務官評論文件，其中包括我們對其他項目的展望以及進一步的分析以及 GAAP 與非 GAAP 調節。

In conclusion, I am pleased that for 2023, we achieved revenue growth of 15% and EPS growth of over 20%. We achieved the 7th consecutive year of over 50% incremental non-GAAP operating margins, resulting in non-GAAP operating margin of 42%. And we finished the year with record backlog and cRPO setting ourselves up for a great 2024. As always, I'd like to thank our customers, partners and our employees for their continued support.

總而言之，我很高興2023年我們實現了15%的營收成長和20%以上的每股盈餘成長。我們連續 7 年實現非 GAAP 營業利潤率增量超過 50%，最終非 GAAP 營業利潤率達到 42%。我們以創紀錄的積壓和 cRPO 結束了這一年，為美好的 2024 年做好了準備。一如既往，我要感謝我們的客戶、合作夥伴和員工的持續支持。

And with that, operator, we will now take questions.

接線員，我們現在開始提問。

(Operator Instructions) Your first question comes from Jason Celino with KeyBanc Capital Markets.

（操作員說明）您的第一個問題來自 KeyBanc Capital Markets 的 Jason Celino。

Happy Monday. So maybe my first question on the backlog strength, really impressive, especially given the hard year-over-year comp. John and Anirudh, what drove the strength here? It sounds like its hardware related or maybe it's broad based. Anything helpful?

週一快樂。因此，也許我的第一個問題是關於積壓實力，確實令人印象深刻，特別是考慮到逐年比較。約翰和阿尼魯德，是什麼推動了這裡的力量？聽起來它與硬體相關，或者可能具有廣泛的基礎。有什麼幫助嗎？

Jason, yes, it's very broad-based, broad-based across geographies and broad-based across all of the businesses. Actually, on the hardware front, you might recall this time last year, we finished with over 6 months of backlog for hardware. We addressed those lead times at the start of the year. And now we're down to a more normal 8 weeks of hardware backlog. So when you compare the backlog at the end of '23 against the end of '22, I think it reflects strong bookings, broad-based bookings across all geographies, across all businesses. But on the hardware side, slightly less hardware or maybe less hardware, certainly in backlog at the end of '23 versus the end of '22.

傑森，是的，它的基礎非常廣泛，跨地域、跨所有業務。實際上，在硬體方面，您可能還記得去年這個時候，我們完成了超過 6 個月的硬體積壓。我們在年初就解決了這些交貨時間問題。現在，我們的硬體積壓已降至更正常的 8 週。因此，當你將 23 年底和 22 年底的積壓訂單進行比較時，我認為這反映了所有地區、所有企業的強勁預訂、廣泛預訂。但在硬體方面，與 22 年底相比，23 年底的積壓情況肯定是硬體略有減少或可能減少。

Okay. And then when we think about 2024 as a whole, is it a big renewal year? Or I guess, how does 2024 look compared to other years particularly '23, when you think about renewal timing and things like that?

好的。然後，當我們整體思考 2024 年時，這是一個重大的更新年嗎？或者我猜，當你考慮更新時間和類似的事情時，2024 年與其他年份（尤其是 23 年）相比怎麼樣？

Yes. Great question, Jason, that's a -- last year was kind of very heavily weighted towards the second half for renewals. We don't expect it to be that heavily weighted in the second half of this year. Looking at software renewals and when they come due, if you look at the annual value, it's probably weighted 40% first half to 60% second half.

是的。很好的問題，傑森，去年下半年續約的比重非常大。我們預計今年下半年它的權重不會那麼重。看看軟體更新和到期時間，如果你看看年度價值，它可能會佔上半年的 40% 到下半年的 60%。

Your next question comes from Charles Shi with Needham.

你的下一個問題來自查爾斯·施和李約瑟。

I guess, top of the mind of many investors. Can you guys provide any thoughts on the Synopsys and ANSYS merger or whatever you call it. Especially now, Cadence probably needs to execute on that Intelligent System Design strategy more organic way than -- organic way? Any thoughts would be great.

我想，這是很多投資人最關心的問題。你們能否就 Synopsys 和 ANSYS 合併或無論你們如何稱呼它提出任何想法。尤其是現在，Cadence 可能需要以比有機方式更有機的方式執行智慧系統設計策略？任何想法都會很棒。

Yes. Charles, this is Anirudh. So as you know, we have been executing on our Intelligent System Design strategy for 6 years now. We started this in 2018. And we know for a while that there will be this convergence of electrical and mechanical domains. This convergence of system and semi-companies, semi-companies becoming system companies and system companies doing silicon, as you all know. And now we have commented that about 45% of our business is coming from system companies.

是的。查爾斯，這是阿尼魯德。如您所知，我們執行智慧系統設計策略已有 6 年了。我們於 2018 年開始這項工作。我們很早就知道電氣和機械領域將會整合。眾所周知，系統公司和半公司的融合，半公司成為系統公司，系統公司做晶片。現在我們評論說我們大約45%的業務來自系統公司。

But this is not -- I mean we have been executed on this from 2018 and focusing on, of course, our core business, which is EDA, expanding into SD&A, which is what we call System Design & Analysis and of course, AI over the last 5, 6 years. And if you look at our results on SD&A, even in 2023, our business revenue is up 22% in SD&A. And it has been up more than 20% for the last several years, whereas that market is not really growing at that rate. So we are gaining a lot of share in SD&A and this is primarily due to our products, right, and our customer response. So the customers have really embraced our strategy and embraced our product differentiation.

但這不是——我的意思是我們從2018 年就開始執行這個任務，當然，我們的重點是我們的核心業務，即EDA，擴展到SD&A，也就是我們所說的系統設計和分析，當然還有人工智慧。過去5、6年。如果你看看我們的 SD&A 業績，即使在 2023 年，我們的 SD&A 業務收入也成長了 22%。過去幾年成長了 20% 以上，而該市場並沒有真正以這個速度成長。因此，我們在 SD&A 方面獲得了很大的份額，這主要歸功於我們的產品和客戶的反應。因此，客戶確實接受了我們的策略並接受了我們的產品差異化。

So we first started with the finite element with Clarity, and that is benchmarking very well, winning a lot of share, a lot of customers. And then recently, you must have seen our new product in CFD. CFD is a big market. That's the -- there are two big simulation areas in SD&A. One is finite element, which we are already had and the other is CFD. And with Millennium, this is like one of the most revolutionary products in CFD in the last 30 years, and I can tell you more about Millennium later.

因此，我們首先從 Clarity 的有限元開始，這是非常好的基準測試，贏得了許多份額，很多客戶。最近，您一定在 CFD 中看到了我們的新產品。 CFD是一個很大的市場。這就是——SD&A 有兩個大的類比領域。一種是有限元，我們已經有了，另一種是CFD。對於 Millennium，這就像過去 30 年來 CFD 中最具革命性的產品之一，稍後我可以告訴您更多有關 Millennium 的資訊。

So -- and then the third thing in our SD&A strategy is we are the only company that has a very strong position in packaging and PCB, which is critical for chiplets and 3D-IC. So overall, I feel very confident in terms of our market position. The strategy we have implemented for 6 years, and I see a lot of growth and momentum going forward.

因此，我們 SD&A 策略中的第三件事是，我們是唯一一家在封裝和 PCB 領域擁有非常強大地位的公司，這對於小晶片和 3D-IC 至關重要。總的來說，我對我們的市場地位非常有信心。我們已經實施該策略六年了，我看到了未來的巨大成長和動力。

Maybe a follow-up. I do want to dig a little bit into your digital IC design and the sign-up revenue. You reported last quarter, I think it's exceeding $300 million when it has been bumping around $250 million since, I think, early part of 2022. But then it does seem to show some really good strength since second half '23. You talked about the share gains, and I do understand this is the part where you have the most overlap with your direct competitor, Synopsys. And just really curious, how sustainable the strength you saw in Q4? And is there any color you can provide us on what's driving the revenue upside for that business in the fourth quarter? How should people think about the sustainability of that?

也許是後續行動。我確實想深入了解你們的數位 IC 設計和註冊收入。你上個季度報告說，我認為自2022 年初以來，它一直在2.5 億美元左右上漲，但我認為它已經超過了3 億美元。但自23 年下半年以來，它似乎確實表現出了一些非常好的實力。您談到了份額收益，我確實知道這是您與直接競爭對手 Synopsys 重疊最多的部分。我真的很好奇，您在第四季度看到的強勁勢頭有多可持續？您能否向我們提供有關推動該業務第四季營收成長的因素的資訊？人們應該如何考慮其可持續性？

Charles, that's a good question on digital. I mean there are multiple reasons driving that. But I would say the main -- and we had good growth in Q4, as you saw in our digital business. But of course, the main reason that's driving that is the AI super cycle. So there's a lot more design activity. You even noticed some of our key partners, increasing the Cadence of their major kind of product development. So there is AI, in AI, we participate in several ways. One is just the build-out of the AI infrastructure, which is, of course, a great partnership with NVIDIA and all the other hyperscalers.

查爾斯，這是一個關於數字的好問題。我的意思是有多種原因推動這一點。但我想說的是，我們在第四季度取得了良好的成長，正如您在我們的數位業務中看到的那樣。當然，推動這一趨勢的主要原因是人工智慧超級週期。所以還有更多的設計活動。您甚至注意到我們的一些關鍵合作夥伴，提高了他們主要產品開發的節奏。所以就有了人工智慧，在人工智慧中，我們以多種方式參與。其中之一就是人工智慧基礎設施的擴建，這當然是與 NVIDIA 和所有其他超大規模供應商的良好合作夥伴關係。

And then also, our AI-enabled products like Cerebrus and Optimality and overall AI portfolio. So as I mentioned in my prepared remarks, Cerebrus, which is the flagship product for digital implementation using AI. Our business went to 4x. So that's also providing a lot of growth in terms of -- so there's one there is overall much more design activity, especially at the most advanced node and then AI products provide acceleration on top of that.

然後還有我們的人工智慧產品，例如 Cerebrus 和 Optimality 以及整體人工智慧產品組合。正如我在準備好的演講中提到的，Cerebrus 是使用人工智慧進行數位實施的旗艦產品。我們的業務成長了 4 倍。因此，這也帶來了很大的成長——因此總體上有更多的設計活動，特別是在最先進的節點，然後人工智慧產品在此基礎上提供加速。

And then the other thing that I had mentioned before, but as people use Cerebrus, which is the overall AI product and digital implementation, it also has a pull-through of the full flow, not just place and route, but also synthesis and signoff. So what I'm very pleased to see is one AI products like Cerebrus is doing well, but they're also pulling through synthesis. Our position has improved dramatically in synthesis in the last 1 year and also a lot of signoff engagement. So overall, I'm pretty pleased with the technology progress, the AI progress, and also engagement with some big customers that traditionally were not using Cadence. And now, like we mentioned, all top 20 customers are using Cadence solutions in digital. So we'll see how it progresses, but I think it's good progress on digital, and I expect that to continue.

然後是我之前提到的另一件事，但是當人們使用 Cerebrus（整體人工智慧產品和數位實現）時，它也具有整個流程的拉通，不僅僅是佈局和佈線，還包括綜合和簽核。所以我很高興看到像 Cerebrus 這樣的人工智慧產品做得很好，而且它們也在綜合來拉動。在過去的一年裡，我們在綜合方面的地位有了顯著的提高，簽核參與度也很高。總的來說，我對技術進步、人工智慧進步以及與一些傳統上不使用 Cadence 的大客戶的合作感到非常滿意。現在，正如我們所提到的，所有排名前 20 名的客戶都在使用 Cadence 數位解決方案。所以我們會看到它的進展如何，但我認為這是數位化的良好進展，我希望這種情況能繼續下去。

Charles, I would just add to that, that in Q4, we saw some very good cash collections from customers that were kind of lower creditworthy customers that we didn't think we would collect those -- that cash. So it wasn't in our forecast. So we had some upside from that.

查爾斯，我想補充一點，在第四季度，我們看到一些來自信譽較低的客戶的非常好的現金收款，我們認為我們不會收取這些現金。所以這不在我們的預測之內。所以我們從中得到了一些好處。

Your next question comes from Vivek Arya with Bank of America Securities.

您的下一個問題來自美國銀行證券公司的 Vivek Arya。

I actually had a question on growth. Just kind of first on the segment side, IP growth has been more modest than the entire company growth. So I was hoping if you could give us some color on that. But then Anirudh, my bigger question is that when I look at the overall sales growth for Cadence, right, so 19% in '22 than 15% last year, and now 12% is what you're guiding to for this year. I mean, these are impressive growth rates versus the semiconductor industry, but still, it shows a deceleration, right, for the last few years, which is very different then the acceleration that we see for a lot of other semiconductor companies that are exposed to the AI and Generative AI team.

我實際上有一個關於成長的問題。首先在細分市場方面，知識產權的成長比整個公司的成長更為溫和。所以我希望你能給我們一些關於這一點的資訊。但 Anirudh，我更大的問題是，當我查看 Cadence 的整體銷售成長時，對吧，22 年的 19% 是去年的 15%，而現在您今年的目標是 12%。我的意思是，與半導體行業相比，這些增長率令人印象深刻，但它仍然顯示出過去幾年的減速，這與我們看到的許多其他半導體公司的加速非常不同。人工智慧和生成人工智能團隊。

So what is the right way to interpret this deceleration in your sales? Like should we be expecting acceleration back at some point as some of these AI initiatives get bigger? Or what is the right way to interpret and compare your growth rate versus the acceleration of growth in a number of the AI names?

那麼，解釋銷售減速的正確方法是什麼？就像我們是否應該期待隨著其中一些人工智慧計劃變得更大而在某個時候加速回歸？或者解釋和比較您的成長率與許多人工智慧名稱的成長加速的正確方法是什麼？

Yes, Vivek, good question. So first, on the IP part, like in '23, I think first 3 quarters, we had -- the growth was much more challenged is primarily with the compare the previous year, but as you know, and some of the macro uncertainties but as you can see in Q4, we had very strong growth in IP, more than 30% growth in IP. And also, this whole AI super cycle, as you know, is driving much more disaggregation right? So the 3D-IC is consolidated at HPC and AI application and that requires more IP, like UCIe or SerDes IP, and then HBM and memory IP. And that's why we acquired assets of the 5 assets of Rambus and overall our own portfolio and UCIe and DDR and all is doing pretty well. And then we did start several acquisitions to improve our talent in IP. So overall, I do think because of AI, because of our own actions that IP should do much better in '24. That's our current modeling.

是的，維維克，好問題。首先，在智慧財產權方面，就像23 年一樣，我認為前3 個季度，我們的成長面臨更大的挑戰，主要是與前一年相比，但正如你所知，以及一些宏觀不確定性，但正如您在第四季度所看到的，我們的 IP 成長非常強勁，IP 成長超過 30%。而且，如您所知，整個人工智慧超級週期正在推動更多的分解，對嗎？因此，3D-IC 在 HPC 和 AI 應用中整合，這需要更多 IP，例如 UCIe 或 SerDes IP，然後是 HBM 和記憶體 IP。這就是為什麼我們收購了 Rambus 的 5 項資產以及我們自己的整體投資組合以及 UCIe 和 DDR 的資產，一切都表現得很好。然後我們確實開始了幾次收購，以提高我們在智慧財產權方面的人才。所以總的來說，我確實認為由於人工智慧，由於我們自己的行動，IP 在 24 年應該做得更好。這就是我們目前的建模。

And '23 had some unusual challenges like I mentioned. But going forward, IP business should improve. And we have focused on profitability over the last few years in our IP business. And I think I'm pleased to say that the profitability levels we are happy with now, okay? So now I think we can focus more on growth and expanding our portfolio. And you may have also seen that there's all these other activity as most advanced nodes and more foundries, and we're also pleased with our partnership with Intel, Intel Foundry that we just announced today. And also all the other major foundries, but we are glad to do much more with IFS, and that should also help our IP business going forward.

正如我所提到的，23 年遇到了一些不尋常的挑戰。但展望未來，IP 業務應該會有所改善。過去幾年我們一直專注於知識產權業務的獲利能力。我想我很高興地說我們現在對盈利水平感到滿意，好嗎？所以現在我認為我們可以更專注於成長和擴大我們的投資組合。您可能還看到了所有這些其他活動，例如最先進的節點和更多的代工廠，我們也對我們今天剛剛宣布的與英特爾、英特爾代工廠的合作夥伴關係感到高興。還有所有其他主要代工廠，但我們很高興與 IFS 一起做更多事情，這也應該有助於我們 IP 業務的發展。

And Vivek, I'd just like to add, I mean you asked about how to look at the revenue growth. We tend to look over a 3-year CAGR because most of our customers are on 3-year baseline contracts on the software side. And if you look at -- since 2017, our 3-year CAGR has been accelerating, and it continues to accelerate. In 2022, we hit 15%. We actually exceeded 15% on a 3-year CAGR basis. For last year, we're very, very pleased that we were over 15% again. And then at the midpoint of the guide for '24, the 3-year CAGR is about 15.3%. So that will be 3 consecutive years of over 15% revenue growth on a 3-year CAGR basis. Now from time to time, you can get some lumpiness in things like hardware timing or IP timing, and that can distort individual quarters or individual years. But we do think looking over a 3-year CAGR basis is probably the best way to look at it. That's how we look at it ourselves.

Vivek，我想補充一點，我的意思是你問如何看待收入成長。我們傾向於關注 3 年複合年增長率，因為我們的大多數客戶在軟體方面都簽訂了 3 年基線合約。如果你看一下——自 2017 年以來，我們的 3 年複合年增長率一直在加速，而且還在繼續加速。 2022 年，我們將達到 15%。事實上，我們的 3 年複合年增長率超過了 15%。去年，我們非常非常高興再次超過 15%。然後在 24 年指引的中點，3 年複合年增長率約為 15.3%。因此，以 3 年複合年增長率計算，這將是連續 3 年收入成長超過 15%。現在，您有時會在硬體計時或 IP 計時等方面遇到一些混亂，這可能會扭曲個別季度或個別年份。但我們確實認為，以 3 年複合年增長率為基礎可能是看待這個問題的最佳方式。我們自己也是這麼看的。

Got it. And for my follow-up, maybe, John, one or two clarifications, what's the assumption for China contribution in '24? And then the incremental EBIT, I think from the guidance, it seems like it's below 50%, right? It's still impressive, but it is below what we have been used to the last few years. So if you could clarify that, that would be very helpful also.

知道了。約翰，對於我的後續行動，也許需要一兩個澄清，24 年中國貢獻的假設是什麼？然後是增量息稅前利潤，我認為從指導來看，它似乎低於 50%，對嗎？它仍然令人印象深刻，但低於我們過去幾年所習慣的水平。因此，如果您能澄清這一點，那也會非常有幫助。

Yes. Sure. Great questions again, Vivek. On the incremental margin front, we typically don't start the year in the initial guide with over 50%. We tend to start lower than that and we build towards greater than 50% with growth through the year. As you know, we always like to under promise and over deliver. But -- and if you look at our incremental margin over the last few years that it was slightly lower in 2023 compared to previous years. And that's because -- on the organic side, we had incremental margins north of 55%, but we did some acquisitions. And typically, when you have an acquisition, it can be dilutive in the early year or two, but -- and that's a bit of a headwind for incremental margins.

是的。當然。又是一個很好的問題，維韋克。在增量利潤方面，我們在最初的指南中通常不會在年初時超過 50%。我們的起點往往低於這個數字，但隨著全年的成長，我們的目標是超過 50%。如您所知，我們總是喜歡承諾不足、交付過多。但是，如果你看看我們過去幾年的增量利潤率，你會發現 2023 年的利潤率比前幾年略有下降。這是因為，在有機方面，我們的增量利潤率超過 55%，但我們進行了一些收購。通常情況下，當你進行收購時，它可能會在最初的一兩年內被稀釋，但是——這對增量利潤來說有點不利。

In relation to China, glad you asked me about that. But China, the last 4 years for China, China has contributed 15% of our 2020 revenue, then followed that with 13% of '21, 15% in '22 and 17% in '23. Now last year, I think China benefited from that large hardware backlog that we had. That was kind of an outsized portion of that backlog was for the China region. So it was a boom year last year for China. I wouldn't expect to repeat that this year. In fact, our guide, we'd expect China to be flat or slightly down. So we've kind of derisked China into the 14% to 15% range for this year, which would be consistent with the previous 3 years.

關於中國，很高興你問我這個問題。但中國，過去4年，中國貢獻了我們2020年收入的15%，然後是21年的13%、22年的15%和23年的17%。去年，我認為中國受益於我們大量的硬體積壓。其中很大一部分積壓訂單來自中國地區。所以去年對中國來說是繁榮的一年。我預計今年不會重蹈覆轍。事實上，我們的指南預計中國將持平或略有下降。因此，我們今年將中國的風險降低到了 14% 至 15% 的範圍內，這與前三年一致。

Your next question comes from Gary Mobley with Wells Fargo Securities.

您的下一個問題來自富國銀行證券公司的加里·莫布里。

Let me apologize in advance for the background noise. I want to ask about the disconnect between record levels of cRPO and what is assumed in your revenue outlook and as well your higher outlook for upfront revenue. And so why the assumption that less of that cRPO translates into revenue in fiscal year '24, especially considering the higher mix of upfront?

請容許我提前為背景噪音道歉。我想詢問創紀錄的 cRPO 水平與您的收入前景假設以及您對預付收入的較高預期之間的脫節。那麼，為什麼會假設 cRPO 較少轉化為 24 財年的收入，特別是考慮到預付款的組合較高呢？

Yes, Gary, good question. The -- yes, in terms of cRPO and the relationship between cRPO and this year's revenue, if you recall last year, we had over 6 months of hardware backlog in cRPO at the end of 2022. So a large portion of our hardware revenue in '23 came out of backlog at the end of '22, we ramped up production capacity and we're back to more normal levels of about 8 weeks lead time now for deliveries on the hardware, which is really, really important for customers. Customers want to be able to purchase the hardware and feel like they're going to get delivery of that hardware within the year. So typically, your revenue and hardware is more correlated to your production capacity than it is to what's coming out of backlog versus what's coming out of new business in the year.

是的，加里，好問題。是的，就 cRPO 以及 cRPO 與今年收入之間的關係而言，如果您還記得去年，到 2022 年底，我們的 cRPO 硬體積壓已超過 6 個月。因此，我們的硬體收入的很大一部分來自於'23 在'22 年底結束了積壓，我們提高了產能，現在硬體交付時間恢復到了大約8 週的正常水平，這對客戶來說非常非常重要。客戶希望能夠購買硬體並感覺他們將在一年內收到該硬體。因此，通常情況下，您的收入和硬體與您的生產能力的相關性更高，而不是與積壓訂單的數量和當年新業務的數量的相關性。

And as a result of addressing those hardware lead times, the revenue profile for this year takes a slightly different shape to 2023. In 2023, in Q1, we had a lot of hardware coming out of backlog in 2024, we expect another record hardware revenue year and the business is planning to build more hardware each quarter throughout 2024 to meet that demand. But there's kind of more of, I guess, hardware revenue is expected to grow quarter-over-quarter this year, whereas last year, Q1 was our biggest hardware quarter.

由於解決了這些硬體交付週期問題，今年的收入狀況與 2023 年略有不同。2023 年第一季度，我們有大量硬體在 2024 年完成積壓工作，我們預計硬體收入將再創新高該公司計劃在2024年每季生產更多硬體以滿足這一需求。但我想，今年的硬體收入預計將環比成長，而去年第一季是我們最大的硬體季度。

Just to be clear, John, cRPO does not include hardware backlog that RPO does?

John，需要澄清的是，cRPO 不包括 RPO 所包含的硬體積壓工作？

The cRPO would include hardware. I mean, even when you have over 6 months hardware delivery lead time, it would all be expected to revenue in a year. So that's -- although it's in your backlog, it's also all in your cRPO. So cRPO last year would have had a lot more hardware in it than cRPO this year, certainly on the product revenue side.

cRPO 將包括硬體。我的意思是，即使您有超過 6 個月的硬體交付週期，預計也會在一年內實現收入。所以，儘管它在您的積壓工作中，但也全部在您的 cRPO 中。因此，去年的 cRPO 比今年的 cRPO 擁有更多的硬件，尤其是在產品收入方面。

All right. And I wanted to circle back, Anirudh on the metric you gave in your prepared remarks, that is a quadrupling of the Cerebrus run rate at several market-shaping customers. So should we take that to mean the annual contract value for those who took Cerebrus at market-shaping customers quadrupled -- or maybe if you can just clarify that I'm missing that?

好的。 Anirudh，我想回顧一下您在準備好的評論中給出的指標，即幾個市場塑造客戶的 Cerebrus 運行率的四倍。那麼我們是否應該認為這意味著那些在市場塑造客戶中使用 Cerebrus 的人的年度合約價值翻了兩番——或者也許你可以澄清一下我錯過了這一點？

Gary, so, yes. I think Cerebrus doing very well. It deployed at all the top 10 customers. And actually, even AI, in general, we mentioned a number of customer engagements are up like 10x in the last 12 months. And so Cerebrus run rate, as we have mentioned before, the Cerebrus business, first, the customers will try some and then they will adopt more. So I think what's good to see in Q4 is what people were -- what the customers were doing and then they have adopted that at a much bigger rate.

加里，所以，是的。我認為 Cerebrus 做得很好。它部署在所有前 10 名客戶中。實際上，即使是人工智慧，總的來說，我們提到過去 12 個月內許多客戶參與度增加了 10 倍。所以 Cerebrus 的運行率，正如我們之前提到的，Cerebrus 業務首先，客戶會嘗試一些，然後他們會採用更多。因此，我認為第四季最好看到的是人們的行為——客戶在做什麼，然後他們以更大的速度採用了這些行為。

So we are happy to see that. I think there is still room to go in that. Like we have always mentioned that we think it will take 2 contract cycles and we are like that 6 years and we are like 2 years into it or 2 or 3 years into it. But that's good in our model, right? We want consistent growth going forward. But yes, the uptick in Cerebrus is very promising. And then the other products are -- came a little after Cerebrus, like Verisium or Allegro X AI or Virtuoso Studio or Optimality, and they're also seeing good progression.

所以我們很高興看到這一點。我認為這方面還有空間。就像我們一直提到的那樣，我們認為這需要 2 個合約週期，我們大約需要 6 年，我們大約需要 2 年或 2 或 3 年。但這在我們的模型中很好，對吧？我們希望未來能持續成長。但是，是的，Cerebrus 的成長是非常有希望的。然後是其他產品——在 Cerebrus 之後出現，例如 Verisium 或 Allegro X AI 或 Virtuoso Studio 或 Optimality，它們也看到了良好的進展。

So overall, in terms of AI, what I'm very happy about is we are -- I mentioned this before also in the last call, we have 3 big ways to benefit from AI. And this is true for any kind of new technology. There are a lot of comparisons to AI, but if you compare it to like the Internet, the first phase is the infrastructure development, okay? So -- and this -- our marquee partnership with NVIDIA, which we have had for more than a decade, and we talked about it today with developing AI products with them, them developing their own chips. Palladium, we are a development partner with NVIDIA in Palladium for more than a decade, and that also puts Palladium in a very strong position with all the other kind of AI developments. So that's the first phase of AI benefit, which is more the infrastructure.

總的來說，就人工智慧而言，我非常高興的是——我之前也在上次電話會議中提到過，我們有 3 種從人工智慧中受益的重要方法。對於任何一種新技術都是如此。和人工智慧有很多比較，但是如果你把它比喻成互聯網，第一階段是基礎建設，好嗎？因此，我們與 NVIDIA 的合作已有十多年了，今天我們討論了與他們一起開發人工智慧產品，他們開發自己的晶片。 Palladium，十多年來，我們一直是 NVIDIA Palladium 的開發合作夥伴，這也使 Palladium 在所有其他類型的 AI 開發中處於非常有利的地位。這是人工智慧優勢的第一階段，更多的是基礎設施。

And then the second phase is like what you asked, which is our own products. And it started with Cerebrus in digital side, but now we have 5 major kind of co-pilot platforms in all the 5 businesses, and those are progressing pretty well moving from like initial deployments to more wider deployments. And that's the second phase of AI deployments in which AI will be adopted into existing products like chip design and system design. And one thing I want to point out is there's a lot of talk of what is a good application for AI. I believe one of the best applications for AI is chip design. It's because over the last 30 years, we have done so much work in automatic chip design. We have a language like RTL, we have all kinds of optimization we have built in. So the chip process is already very automated. So it's an ideal thing to apply AI on top of it for chip and system design, which is what we are seeing.

然後第二階段就像你問的那樣，是我們自己的產品。它從數位方面的 Cerebrus 開始，但現在我們在所有 5 項業務中擁有 5 種主要的副駕駛平台，而這些平台從最初的部署到更廣泛的部署進展順利。這是人工智慧部署的第二階段，人工智慧將被採用到晶片設計和系統設計等現有產品中。我想指出的一件事是，關於什麼是人工智慧的良好應用程式有很多討論。我相信人工智慧最好的應用之一是晶片設計。因為在過去的30年裡，我們在自動化晶片設計上做了許多工作。我們有像RTL這樣的語言，我們內建了各種最佳化。所以晶片流程已經非常自動化。因此，將人工智慧應用於晶片和系統設計是一個理想的事情，這就是我們所看到的。

And then the third phase of AI is new products it will enable. And I believe for several years, and that's why the investment in OpenEye, the OpenEye, the biggest new market that AI will enable will be life sciences, okay, and biosimulation and bio life sciences. And I think you will see that years going forward. So there are these 3 phases of our AI activity. One is AI infrastructure. Two is applying AI to our own products for chip and system design. And third is AI in bio and life sciences. So overall, I'm very pleased, very confident in our positioning in AI and the results we have delivered.

人工智慧的第三階段是它將帶來新產品。我相信未來幾年，這就是為什麼對 OpenEye 的投資，OpenEye，人工智慧將帶來的最大的新市場將是生命科學，好吧，還有生物模擬和生物生命科學。我想你會看到未來的歲月。我們的人工智慧活動分為這三個階段。一是人工智慧基礎設施。二是將人工智慧應用到我們自己的產品中，進行晶片和系統設計。第三是生物和生命科學領域的人工智慧。總的來說，我對我們在人工智慧領域的定位和我們所取得的成果感到非常高興和充滿信心。

Your next question comes from Jay Vleeschhouwer with Griffin Securities.

您的下一個問題來自 Griffin 證券公司的 Jay Vleeschhouwer。

Anirudh, you noted the large number of new products you've introduced just in the last year, Virtuoso Studio, Optimality, Allegro X and so forth. And then, of course, Millennium just a couple of weeks ago. Could you talk about how you're thinking about the contribution of those incrementally collectively this year as part of your guidance and perhaps even rank the ones that you think might be most incremental to your revenue growth this year over and above the pre-existing products such as Innovus and the signoff products, then I've follow-up.

Anirudh，您注意到去年您推出了大量新產品，Virtuoso Studio、Optimality、Allegro X 等等。當然，還有幾週前的千禧年。作為您的指導的一部分，您能否談談您如何考慮今年這些增量集體的貢獻，甚至可能對您認為今年收入增長可能比現有產品增量最大的產品進行排名比如Innovus和signoff產品，然後我就跟進了。

Jay, good question. I mean, as you know, we are a very innovative company, and we have done that for years now, and we invest one of the highest percentages of R&D -- of revenue into R&D. And then it's good to have all these new products in multiple areas, of course, the 3 big areas being like EDA, SDA and AI. But we don't try to like rank our children. We want all of them to do well, and it's also difficult to predict how it will -- because these are all for the long run, right? So there is, of course, a lot of momentum with the AI products. There's a lot of momentum with 3D-IC and chiplet as you know. There's Millennium, I'm super excited about. I think this is the biggest innovation in CFD in the last 30 years. And I talked about the 3-layer cake, right? Which is AI orchestration at the top layer, physical simulation, physics-based modeling at the middle layer and then accelerate compute at the bottom layer and CFD needed to be disrupted in that context, right?

傑伊，好問題。我的意思是，如您所知，我們是一家非常創新的公司，我們已經這樣做了很多年，而且我們在研發方面的投資比例最高，佔收入的比例之一。然後，在多個領域擁有所有這些新產品是件好事，當然，三大領域是 EDA、SDA 和 AI。但我們不會試圖對我們的孩子進行排名。我們希望他們所有人都表現出色，但也很難預測結果如何——因為這些都是為了長遠考慮，對嗎？因此，人工智慧產品當然有很大的發展動能。如您所知，3D-IC 和小晶片的發展勢頭強勁。千禧年來了，我非常興奮。我認為這是近 30 年來 CFD 領域最大的創新。我談到了三層蛋糕，對嗎？頂層是人工智慧編排，中間層是物理模擬、基於物理的建模，然後是底層的加速計算，而 CFD 在這種情況下需要被顛覆，對嗎？

So we have -- and we didn't talk about it much when we made the acquisition about 2 years ago. There is acquisition from Stanford Cascade, which is very, very high fidelity, very accurate to CFD. So we had that at the heart of it. And then AI on top and then accelerate compute at the bottom together with NVIDIA. And this completely changes the game in CFD. For the first time, we are able to simulate entire cars and planes in few hours is almost emulation for systems that has never been possible before. So there is a lot of potential in Millennium. Now because Millennium is a new product, we are offering both cloud and on-prem.

所以我們——大約兩年前進行收購時，我們並沒有過多談論這一點。有來自史丹佛 Cascade 的採集，保真度非常非常高，CFD 非常準確。所以我們把它當作核心。然後是頂部的人工智慧，然後與 NVIDIA 一起加速底部的運算。這徹底改變了 CFD 的遊戲規則。我們第一次能夠在幾個小時內模擬整個汽車和飛機，這幾乎是對以前從未可能實現的系統的模擬。所以千禧年有很大的潛力。現在，由於 Millennium 是一個新產品，因此我們同時提供雲端和本地部署服務。

Palladium is mostly, as you know, on our chip business, Palladium is mostly on-prem but Millennium is both in CFD. And right now, the -- most of the customers are choosing the cloud version, which is great. It's more ratable, okay? So then Millennium and then you must have seen today, we have this great partnership with Dassault. Actually, I'm also pretty happy about that. Dassault is a leader in PLM and MCAD, and overall partnership. We have broadening partnership with this. So -- and then we talked about our IP business, how that can grow and this new partnership with Intel and IFS hardware continues to do well. So I think it's good to have multiple engines contributing to the growth. And then we always focus on margin at the same time. So we are well positioned going forward. But it's difficult to predict which one will do better than the others, and we don't guide on a product basis anyway.

如您所知，Palladium 主要用於我們的晶片業務，Palladium 主要用於本地部署，但 Millennium 均屬於差價合約業務。現在，大多數客戶都選擇雲端版本，這很棒。更值得評價，好嗎？那麼，千禧年，然後您今天一定看到了，我們與達梭建立了良好的合作夥伴關係。其實我對此也很高興。達梭是 PLM 和 MCAD 以及整體合作夥伴關係領域的領導者。我們與此建立了廣泛的合作關係。然後我們討論了我們的 IP 業務、該業務如何發展以及與英特爾和 IFS 硬體的新合作夥伴關係繼續表現良好。所以我認為擁有多個引擎來促進成長是件好事。然後我們總是同時關注利潤。因此，我們在未來的發展中處於有利位置。但很難預測哪一個會比其他的做得更好，而且我們無論如何也不以產品為基礎進行指導。

Right. So that's a good segue to my follow-up. And since you mentioned so Dassault, Cadence is actually quite visible here at the conference today. And so my question is, when you think about your ISD strategy generally and perhaps CFD specifically, could you talk about the kind of resources and investments you're having to make to effectuate that strategy beyond or over and above the core EDA strategy? And what do you know now about those markets that you might not have known 3, 4, 5 years ago when you were much earlier in developing the strategy.

正確的。這是我後續行動的一個很好的延續。既然你提到了達梭，Cadence 在今天的會議上實際上非常引人注目。所以我的問題是，當您總體考慮您的 ISD 策略，或具體考慮 CFD 策略時，您能否談談您必須使用哪些資源和投資來實現核心 EDA 策略之外的策略？您現在對那些 3、4、5 年前您可能不了解的市場了解多少，當時您很早就制定了策略。

Yes, Jay, that's a good question. I mean one thing to point out, our SDA business is about in 2023 is about 12% of revenue. So it's already at a good pace. And also, it has enough scale now to apply significant R&D to that space, and also simulation space, right? We know simulation space pretty well. And there's a lot of high R&D synergies from our EDA, R&D to SDA, R&D. So I'm pretty happy with how much R&D we have invested and we'll continue to invest there. But at the same time, it is also very profitable, okay? Which is -- which our model always, right? It's not just revenue growth but also profitability.

是的，傑伊，這是個好問題。我想說的是，我們的 SDA 業務到 2023 年大約是營收的 12% 左右。所以它已經處於良好的節奏。而且，它現在有足夠的規模來將重要的研發應用於該空間以及模擬空間，對嗎？我們非常了解模擬空間。從我們的 EDA、研發到 SDA、研發，有許多很高的研發綜效。因此，我對我們在研發方面的投入感到非常滿意，並將繼續在這方面進行投資。但同時，它也很賺錢，好嗎？這就是我們的模型，對嗎？這不僅僅是收入成長，還有獲利能力。

And which we -- when you asked me, we thought it should be more profitable when we started 6 years ago because simulation is more profitable in EDA. So that's what is playing out in SDA. So it is pretty profitable. And it has played out roughly to the extent I thought it would. In simulation always is accuracy first and then performance and capacity and the market is always looking for new simulators and that's how it has played out in electromagnetic.

當你問我時，我們認為 6 年前開始時，它應該更有利可圖，因為 EDA 中的模擬更有利可圖。這就是 SDA 中正在發生的事情。所以它是非常有利可圖的。事情的發展大致達到了我想像的程度。在模擬中，精度始終是第一位的，然後是性能和容量，市場總是在尋找新的模擬器，這就是電磁領域的表現。

And then in CFD, now I'm much more confident with this disruption, this massive disruption with Millennium. And the key thing with Dassault, and we have mentioned this before, as we -- I'm very confident in SD&A. You can see in terms of product synergy, product differentiation. But we have always said that we are a competition software company, so that also means what we will not do, right? So typically, things in the system space, which are not as computational are things like PLM, things like implementation MCAD, mechanical CAD platforms and Dassault is the clear leader in those. They are great in PLM, they are great in with SOLIDWORKS, in CATIA in the high end. So it's a perfect partner for Cadence. As we focus on competition software and EDA and SBA, packaging and PCB to partner with Dassault and we're glad to see that expansion that was announced today.

然後在 CFD 中，現在我對這個顛覆、千禧年的巨大顛覆更有信心了。達梭的關鍵在於，我們之前已經提到過這一點，因為我們——我對 SD&A 非常有信心。你可以看到在產品協同、產品差異化方面。但我們一直說我們是一家競爭軟體公司，所以這也意味著我們不會做，對嗎？因此，通常情況下，系統空間中運算能力不強的事物包括 PLM、實作 MCAD、機械 CAD 平台等，而達梭在這些方面顯然是領先者。他們擅長 PLM、SOLIDWORKS、高階 CATIA。因此它是 Cadence 的完美合作夥伴。由於我們專注於競賽軟體以及 EDA 和 SBA、封裝和 PCB 來與達梭合作，我們很高興看到今天宣布的擴展。

Your next question comes from Harlan Sur with JPMorgan.

您的下一個問題來自摩根大通的 Harlan Sur。

Your -- back to your IP business, it was up 4, 5 percentage points last year. And I know that it was a relatively tough comp relative to 2022, but I would have thought that the growth in IP would have been closer to your overall growth, just given that higher chip design complexity does motivate your customers to license more IP in order to drive efficiencies in their chip design cycle time. So was there some customer push off of IP into this year, just maybe given timing of customer programs? Or was there some other dynamic that played in relative to your outlook for 12% total growth this year? How do you think your IP business does this year?

回到你的智慧財產權業務，去年成長了 4、5 個百分點。我知道，與2022 年相比，這是一個相對艱難的競爭，但我以為IP 的成長會更接近您的整體成長，只是考慮到更高的晶片設計複雜性確實會激勵您的客戶許可更多IP，以便提高晶片設計週期的效率。那麼，是否有一些客戶將 IP 推遲到今年，可能只是考慮到客戶計劃的時間表？或者是否有其他因素影響了您對今年 12% 總成長的預期？您認為今年您的知識產權業務表現如何？

Yes, good question. I think the shape of the IP revenue last year was a little atypical. I mean I think the two reasons were that in 2023, we had very, very strong Q4. But first 3 quarters were not strong at all. So overall year is in the single digits, like you mentioned, but a very strong Q4. So I think there are a couple of reasons for that. And one is that there were some tough compares from '22 to '23 in IP, especially in the beginning of the year. And then like I mentioned, of course, last couple of years, the macro environment has been tough, though it is improving now. And then IP typically gets affected more than others in terms of a tough macro semiconductor environment.

是的，好問題。我認為去年IP收入的形態有點不典型。我的意思是，我認為有兩個原因：2023 年，我們的第四季非常非常強勁。但前三季的表現並不強勁。因此，就像您提到的那樣，全年總體成長率為個位數，但第四季度非常強勁。所以我認為有幾個原因。其中之一是，從 22 世紀到 23 世紀，智慧財產權領域存在一些艱難的比較，尤其是在今年年初。當然，就像我提到的，過去幾年，宏觀環境一直很艱難，儘管現在正在改善。然後，在嚴峻的宏觀半導體環境中，IP 通常比其他產品受到更大的影響。

So as a combination of that, I think the first 3 quarters were more challenging. But Q4 and then going into this year, I'm pretty cautiously optimistic about IP. One, our portfolio is better, is broader. And then this whole AI super cycle, like I mentioned, and then new engagements we have, like with IFS and other companies. So overall, I feel better about '24 John, do you want to comment about the assumption.

綜合來看，我認為前三季更具挑戰性。但從第四季到今年，我對 IP 持謹慎樂觀的態度。第一，我們的投資組合更好、更廣。然後整個人工智慧超級週期，就像我提到的，然後我們有新的合作，例如與 IFS 和其他公司的合作。所以總的來說，我對 '24 John 感覺更好，你想對這個假設發表評論嗎？

Yes, yes. Of course, Harlan, as you know, we always focus on profitable and scalable revenue growth and the IP revenue contributes largely to our upfront revenue percentage. But last year for 2023, our upfront revenue percentage increased from 15% to 16%. That was on the back of a strong record hardware year. But as you say, IP revenue growth was quite low in comparison to prior years. This year, we're expecting the 16% to go to 17.5%. That's because we expect both of those to contribute significantly to improvement in upfront revenue this year.

是的是的。當然，Harlan，如您所知，我們始終專注於盈利和可擴展的收入成長，而 IP 收入在很大程度上貢獻了我們的前期收入百分比。但去年到 2023 年，我們的預付收入百分比從 15% 增加到 16%。那是在硬體創下強勁記錄的一年之後。但正如您所說，與前幾年相比，知識產權收入成長相當低。今年，我們預計這一比例將從 16% 升至 17.5%。這是因為我們預計這兩者都將為今年預付費用的改善做出重大貢獻。

And then we expect the IP growth to be higher than Cadence average this year. We'll see how it plays out. Okay. Yes.

然後我們預計今年 IP 的成長將高於 Cadence 的平均值。我們將看看結果如何。好的。是的。

Perfect. And then good to see the strong outperformance on the SDA business, right, up 22% last year, certainly outgrowing the overall market in your peers in that segment. The recent Millennium M1 supercomputer, I think, it's a great example of the synergies between your chip design portfolio, your SDA portfolio, right? You're basically taking the success you've had in hardware-based verification and emulation sort of bringing that same concept to your SDA portfolio. It seems like there would be a lot of untapped demand for hardware acceleration within your SDA customer base? Like how big is this market opportunity for the team as you look out over the next several years?

完美的。然後很高興看到 SDA 業務的強勁表現，去年增長了 22%，肯定超過了該領域同行的整體市場。我認為，最近的 Millennium M1 超級電腦是您的晶片設計組合與 SDA 產品組合之間協同作用的一個很好的例子，對吧？您基本上是在利用基於硬體的驗證和模擬方面取得的成功，將相同的概念引入您的 SDA 產品組合中。您的 SDA 客戶群中似乎存在大量未開發的硬體加速需求？展望未來幾年，這個團隊的市場機會有多大？

Absolutely. Even for 30 years, even when I was in grad school, I always believe that hardware acceleration is a massive opportunity for EDA and SDA in general. And you see that worn out in Palladium. So we have always dreamed about hardware acceleration. And that's why there's 3-layer cake. Hardware acceleration is the bottom layer and of course, AI orchestration is the top layer. And a perfect example is Palladium. Now in Palladium and hardware emulation, what happened is if you look at overall functional verification on the chip side first, it's more than a $2 billion business. I think if you look at all the software and hardware became roughly 50% of that. So hardware-assisted verification became almost 50% of chip verification.

絕對地。即使 30 年來，即使在我讀研究生的時候，我始終相信硬體加速對於 EDA 和 SDA 來說是一個巨大的機會。你會看到鈀金的這種情況已經磨損了。所以我們一直夢想著硬體加速。這就是為什麼有三層蛋糕。硬體加速是底層，當然AI編排是頂層。一個完美的例子是鈀。現在，在 Palladium 和硬體模擬中，如果您先查看晶片方面的整體功能驗證，您會發現這是一項超過 20 億美元的業務。我想如果你看看所有的軟體和硬體大約佔其中的 50%。因此硬體輔助驗證幾乎佔據了晶片驗證的50%。

Now CFD is also a $2 billion business. And it needed this hardware-based acceleration along with AI, so I don't know whether it will play out the same way, but there is a potential of a big portion of CFD to go to hardware-based acceleration. Now it will take a few years. And we are clearly leading in that. And the other thing it does, the hardware-based acceleration or emulation for CFD is it will improve the area -- it will improve the market size of CFD as well.

現在差價合約也是一項價值 20 億美元的業務。它需要這種基於硬體的加速和人工智慧，所以我不知道它是否會以同樣的方式發揮作用，但 CFD 的很大一部分有可能轉向基於硬體的加速。現在還需要幾年的時間。我們在這方面顯然處於領先地位。它所做的另一件事是，基於硬體的 CFD 加速或模擬將改善這一領域——它也將擴大 CFD 的市場規模。

Like I was talking to one of these big aerospace companies. And they said, current CFD, the current simulation is only done to 20% of the flight envelope. Which is unheard of in chip design. In chip design, we simulate 99-point-some percent of the use cases so that when the chip comes back, it works. But if you look at the system domain because the accuracy is not there because the speed is not there, they're only covering 20% of the use cases and all of them only in software. So the potential with Millennium is one that 20% goes to much closer to much higher than 50%. And then a big portion of that can go to hardware-assisted emulation and verification. And by the way, the same thing can repeat again, this 3-layer can repeat again in bio, which is a few years out.

就像我正在與其中一家大型航空航天公司交談一樣。他們表示，目前的CFD，目前的模擬只完成了20%的飛行包線。這在晶片設計中是聞所未聞的。在晶片設計中，我們模擬了 99% 的用例，以便當晶片恢復正常時，它可以正常工作。但如果你看看系統領域，因為速度不存在，準確性不存在，它們只涵蓋了 20% 的用例，而且所有這些都只在軟體中。因此，Millennium 的潛力是 20% 遠高於 50%。其中很大一部分可以用於硬體輔助模擬和驗證。順便說一句，同樣的事情可以再次重複，這個三層可以在生物中再次重複，這是幾年後的事情。

But I think right now, the opportunity is there in system simulation and CFD. So I'm pretty optimistic. But it's a new use case for that market. And sometimes the new use cases can take some time to deploy. So we always have to be cautious about that. But the response so far has been phenomenal. And people -- and because they were doing some of this themselves, the customers, but to have a combined solution with AI, software and hardware and you are exactly right. It mimics our success we have done on the chip side.

但我認為現在機會就在系統模擬和 CFD 領域。所以我非常樂觀。但這是該市場的一個新用例。有時，新用例的部署可能需要一些時間。所以我們對此始終必須保持謹慎。但迄今為止的反響是驚人的。人們——因為他們自己（客戶）自己做了一些事情，但是要擁有人工智慧、軟體和硬體的組合解決方案，你是完全正確的。它模仿了我們在晶片方面取得的成功。

Your next question comes from John Marco Conti with Deutsche Bank.

您的下一個問題來自德意志銀行的約翰·馬可·康蒂。

I know you've touched on this already, but could you run us again through the phasing of top line and margins through 2024 guidance, as well as providing some more color on what is causing the lower level of revenue seasonality in your Q1 guidance given Q1 implies 22% versus the median of 25% over the past 7 years in terms of its seasonality. Can we explain this perhaps by hardware and/or IP timing? Or is there something else?

我知道您已經談到了這一點，但您能否再次向我們介紹一下2024 年指導中的營收和利潤的分階段情況，並就導致第一季度指導中收入季節性水平較低的原因提供更多資訊就其季節性而言，第一季意味著 22%，而過去 7 年的中位數為 25%。我們可以透過硬體和/或 IP 時序來解釋這一點嗎？或是還有別的什麼嗎？

Johny, for the question. But yes, on the revenue side, the -- we expect 2024 to take a slightly different shape to 2023. That's largely a function of the revenue mix by quarter. You'll recall last year in 2023, we had 20% upfront revenue in Q1 when the year ended up at 16%, but this year, for Q1, we're expecting 14% in Q1 when the year is expected to be 17.5%. So clearly, from that, you expect that -- we'd expect that upfront revenue to increase quarter after quarter this year, whereas last year, Q1 was really the high watermark for upfront revenue.

強尼，回答這個問題。但是，是的，在收入方面，我們預計 2024 年的情況將與 2023 年略有不同。這在很大程度上取決於每季的收入組合。您還記得去年 2023 年，我們第一季的預付收入為 20%，而今年最終為 16%，但今年第一季度，我們預計第一季為 14%，而全年預計為 17.5% 。很明顯，從這一點來看，我們預計今年的預付費用收入將逐季增加，而去年第一季確實是預付費用的高水位線。

And then on the expense side, we've invested heavily. We have about 1,000 extra heads this year. And that's for continued innovation, and we're launching new products all the time. But -- so with that expense on some of the acquisitions is more front loaded for the year. And as a result, that's kind of feeding into lower margins for Q1 in comparison to the rest of the year. For Q2, Q3 and Q4, we'd expect margins to be similar or higher than last year. Yes. I think that's -- those are probably the main things to get across.

然後在費用方面，我們投入了大量資金。今年我們大約有 1,000 名額外人員。這是為了持續創新，我們一直在推出新產品。但是——因此，今年一些收購的費用更多的是前期負擔。因此，與今年剩餘時間相比，第一季的利潤率有所下降。對於第二、第三和第四季度，我們預計利潤率將與去年相似或更高。是的。我認為這些可能是需要傳達的主要內容。

Yes, that was really good. Really helpful. And perhaps just one last follow-up on the commentary around expectations of operating cash flow into next year. I mean the lower end timing seems flat. So perhaps what are the moving levers there. And also, how come 70% of the backlog is flowing into 2024 compared to 75% in '23?

是的，那真的很好。真的很有幫助。也許這只是對明年營運現金流預期的評論的最後一個後續行動。我的意思是低端時間似乎持平。那麼也許那裡的移動槓桿是什麼？而且，為什麼 70% 的積壓會流入 2024 年，而 23 年為 75%？

Yes. Johny, that's -- yes, let me take the second part first, and then I'll come back to the cash question. But -- so last year, we had over 6 months of lead times -- for hardware delivery lead time. So there was a lot of last year's hardware revenue came out of backlog. The 5% shift can pretty much all be allocated to less hardware coming out of backlog for this year. Now hardware revenue for the year will probably be more of a reflection like it has been in the last few years of just how much hardware we're able to produce in the year, and we expect to increase hardware production each quarter for this year. But to meet the demand that we're expecting. But last year, the operating cash flow was kind of muted. It was less than -- although we beat on all our metrics, we came in just under the midpoint of $1.350 billion, I think it was $1.349 billion for operating cash flow, but that included us investing spending a lot to ramp up on purchase -- advanced purchase of raw materials to build that inventory that we believe we need for hardware this year.

是的。強尼，那是——是的，讓我先討論第二部分，然後我會回到現金問題。但是，去年，我們的硬體交付週期有超過 6 個月的週期。所以去年的硬體收入有很多來自積壓。 5% 的轉變幾乎可以全部分配給今年積壓的較少硬體。現在，今年的硬體收入可能更反映了我們今年能夠生產多少硬件，就像過去幾年一樣，我們預計今年每季都會增加硬體產量。但為了滿足我們期望的需求。但去年，經營現金流有點低迷。儘管我們在所有指標上都表現出色，但我們的業績略低於 13.5 億美元的中點，我認為營運現金流為 13.49 億美元，但這包括我們為增加採購而進行的大量投資支出 - - 提前購買原材料以建立我們認為今年硬體所需的庫存。

We intend to do that again in Q1. But -- so we've already included that in our operating cash guide. So we're investing some of that operating cash to improve gross margins by prepurchasing a bunch of raw materials that we believe we need for -- to keep up with the demand on the hardware side. Now the other thing I wanted to highlight is that the business's forecast for hardware is again for another record hardware revenue year and for hardware demand to continue to accelerate quarter after quarter this year. Normally, I wouldn't include some of their expected demand for the second half. But until I see the -- it's a pipeline business. So we look at lead times. We look at the pipeline kind of closer to the summer before taking up the second half of the year. So the guide does not include the full forecast from the business. I'd like to hedge that back in the second half until we get to the summer. I'd prefer to see the pipeline come through. And then there is potential to take the second half higher when we see that pipeline.

我們打算在第一季再次這樣做。但是 - 所以我們已經將其納入我們的營運現金指南中。因此，我們正在投資一些營運現金，透過預先購買我們認為需要的大量原材料來提高毛利率，以滿足硬體方面的需求。現在我想強調的另一件事是，該公司對硬體的預測再次是硬體收入創紀錄的一年，今年硬體需求將繼續逐季加速成長。通常情況下，我不會包括他們下半年的一些預期需求。但直到我看到——這是一個管道業務。所以我們會關注交貨時間。在下半年之前，我們會在接近夏季的時候關注管道。因此，該指南不包括企業的完整預測。我想在下半年避免這種情況，直到夏天到來。我更希望看到管道通過。當我們看到這條管道時，下半年就有可能會走高。

Your next question comes from Josh Tilton with Wolfe Research.

您的下一個問題來自沃爾夫研究中心的喬許·蒂爾頓。

John, you kind of anticipated what I was going to ask with your last comment there. So I just want to clarify very simply, is what you -- should we just interpret what you said is that even this strong upfront revenue guide, which I think implies another year of 20%-plus growth would still fall under the motto of underpromise and overdeliver?

約翰，你在最後的評論中有點預料到了我要問的問題。所以我只想簡單地澄清一下，我們是否應該解釋一下你所說的是，即使是這個強大的前期收入指南（我認為這意味著又一年20% 以上的增長）仍然屬於「承諾不足」的座右銘並超額交付？

Yes, I think that's fair. That's fair. But I didn't include the full forecast. The guide would have been higher. Of course, we have a strong IP as well this year. I mean, certainly compared to last year. IP didn't contribute a huge amount. I mean it's been a great business for us. but we're much more confident going into '24 of the IP contribution to 2024 revenue. But hardware is going to be strong. Again, I mean, by nature, we always like to kind of hold back on the second half guide for hardware until we see the pipeline around summertime. So we haven't included the full forecast from the business in the guide.

是的，我認為這是公平的。這還算公平。但我沒有包括完整的預測。指南會更高。當然，今年我們也有強大的IP。我的意思是，當然與去年相比。 IP的貢獻不大。我的意思是，這對我們來說是一筆偉大的生意。但我們對 24 世紀智慧財產權對 2024 年收入的貢獻更有信心。但硬體將會很強大。再說一遍，我的意思是，本質上，我們總是喜歡推遲硬體的後半部分指南，直到我們在夏季看到管道。因此，我們沒有在指南中包含該業務的完整預測。

Super helpful. And then just my follow-up is, how do you see the competition maybe specifically in digital changing, if at all? If Synopsys can indeed close this ANSYS acquisition and fully integrate ANSYS's tool set into their design flow.

超有幫助。然後我的後續問題是，您如何看待尤其是在數位化變革方面的競爭（如果有的話）？如果 Synopsys 確實能夠完成對 ANSYS 的收購，並將 ANSYS 的工具集完全整合到他們的設計流程中。

Well, I don't think that will change the competitive landscape at all. That's my assessment in digital or even in SD&A. Because digital, anyway, we are competing very effectively in the marketplace. And with this AI, it is pulling in a full digital full flow position. I think your comment may be more tied to a part of digital, which is like 3D-IC. But with 3D-IC, we always talked about there are three big portions of 3D-IC. There is an actual chip implementation tools, which is -- I mean digital is much bigger than that, right? Digital, we have a very big business, which is growing at all the top 20 customers. But 3D-IC has these three components to it. One is the chip design tools.

嗯，我認為這根本不會改變競爭格局。這是我對數位化甚至 SD&A 的評估。無論如何，因為數位化，我們在市場上的競爭非常有效。借助這種人工智慧，它正在拉動全數位化的全流程位置。我認為你的評論可能與數字的一部分更相關，例如 3D-IC。但是對於3D-IC，我們總是談論3D-IC的三個主要部分。有一個實際的晶片實現工具，我的意思是數字比這要大得多，對吧？數位化方面，我們擁有非常龐大的業務，前 20 名客戶的業務都在成長。但 3D-IC 具有這三個組成部分。一是晶片設計工具。

So in chip design tools, we are the only company that has both analog and digital chip implementation, okay? And the second part in 3D-IC is packaged design and Cadence is the leader in packaged design, and that thing is still a very strong differentiation no matter what the M&A news is outside. And then the third part is the simulation tools like thermal and electromagnetic and there, we are already doing pretty well. So I'm very confident in our product positioning and competitive advantage. No matter what happens on the M&A side because anyway, we are competing very effectively.

所以在晶片設計工具中，我們是唯一一家同時擁有類比和數位晶片實現的公司，好嗎？ 3D-IC的第二部分是封裝設計，Cadence是封裝設計領域的領導者，無論外界有什麼併購消息，這仍然是一個非常強大的差異化。第三部分是熱和電磁等模擬工具，我們已經做得很好了。所以我對我們的產品定位和競爭優勢非常有信心。無論併購方面發生什麼，因為無論如何，我們正在非常有效地競爭。

And then the other thing that is good about Cadence is we also formed a very strong partnership in the ecosystem. We talked about Dassault on the SD&A side. But the other one that I want to highlight, we have a lot of news today, but one of the things that I want to highlight is our partnership with Arm. Arm is also expanding into what they call Total Design, going into more towards silicon, more towards custom solutions. And we are the exclusive partner with Arm as they go implement that. And that really also helps our digital business. And -- so overall, I feel pretty confident in our digital position, including 3D-IC.

Cadence 的另一個優點是我們也在生態系統中建立了非常強大的合作關係。我們討論了 SD&A 方面的達梭。但我想強調的另一件事是，我們今天有很多新聞，但我想強調的一件事是我們與 Arm 的合作關係。 Arm 也正在擴展到他們所謂的“全面設計”，更多地轉向矽、更多地轉向定制解決方案。我們是 Arm 的獨家合作夥伴，他們正在實施這一點。這確實也有助於我們的數位業務。總的來說，我對我們的數位地位非常有信心，包括 3D-IC。

Your next question comes from Ruben Roy with Stifel.

您的下一個問題來自魯本·羅伊和斯蒂菲爾。

Anirudh, I just had a quick question, I guess, to go back to Vivek's question on growth rates, I understand the 3-year CAGR, it's been excellent. It's been growing, and that's really nice to see. But when you think about these phases of AI at this point, is it too early to start thinking about contribution from AI as you go through these renewals? I mean can you talk about how -- if there is -- if you're seeing an impact yet or what that impact is or how we should think about AI as sort of if you think about the next 3 years or contribution to growth looking forward?

Anirudh，我想，我只是有一個簡單的問題，回到 Vivek 關於成長率的問題，我了解 3 年複合年增長率，它非常好。它一直在增長，這真的很高興看到。但是，當您此時考慮人工智慧的這些階段時，在經歷這些更新時開始考慮人工智慧的貢獻是否還為時過早？我的意思是，如果您看到了影響，或者影響是什麼，或者如果您考慮未來 3 年或對成長的貢獻，我們應該如何看待人工智慧？向前？

Yes. I think AI is definitely helping us already, like we mentioned about our AI tools by itself has gone up by 3x and then Cerebrus more higher than that. And then also AI itself is the infrastructure part of AI, like our partnership with NVIDIA and all the hyperscalers. So overall, we are pretty pleased with that. But of course, we are mostly a ratable business. So these things take like multiple years to bleed in. And I think that's fine. Our model always is to have strong revenue growth and margin growth. So I think this thing will still take multiple years to come into our model, but that's -- I think that's a good thing. It provides multiple years of growth.

是的。我認為人工智慧肯定已經在幫助我們了，就像我們提到的，我們的人工智慧工具本身已經成長了 3 倍，而 Cerebrus 的成長幅度更大。人工智慧本身也是人工智慧的基礎設施部分，就像我們與 NVIDIA 和所有超大規模企業的合作夥伴關係一樣。總的來說，我們對此非常滿意。但當然，我們主要是一家需要評級的企業。所以這些事情需要很多年的時間才能融入。我認為這很好。我們的模式始終是實現強勁的營收成長和利潤成長。所以我認為這件事仍然需要多年的時間才能進入我們的模型，但我認為這是一件好事。它提供多年的增長。

Yes. I think it's very early innings right now on the AI adoption. We've been focused mainly on proliferation. And we're very, very pleased with the uptake of our AI tools and just how strongly they're growing on the booking side. It is starting to feed into the P&L already. But as Anirudh says, because it's ratable, that takes time to show up in total. But very, very early innings in adoption of AI tools right now. I think there's a lot more to go.

是的。我認為人工智慧的採用現在還處於早期階段。我們主要關注擴散問題。我們對人工智慧工具的採用以及它們在預訂方面的強勁成長感到非常非常滿意。它已經開始計入損益表中。但正如阿尼魯德所說，因為它是可評級的，所以需要時間才能完全顯現出來。但目前人工智慧工具的採用還處於非常非常早期的階段。我認為還有很多事情要做。

Right, right. Okay. That's very helpful. And then just quickly, John, you talked a lot about the hardware and I think it's pretty clear at this point. But just to make sure I understand, it sounds like lead times have normalized. Is that correct? And also in terms of sort of the visibility you get from your customer base, that hasn't changed, right? Is that what you're saying in terms of how far out your customers are ordering, and then I guess it would be just kind of a function of increased attach rates, which has given you the confidence that you're going to have another big growth here in hardware. I just wanted to make sure I'm thinking about that correctly.

是的是的。好的。這非常有幫助。約翰，你很快就談到了硬件，我認為現在已經很清楚了。但為了確保我理解，聽起來交貨時間已經正常化。那是對的嗎？而且就您從客戶群獲得的可見性而言，這也沒有改變，對吧？這就是你所說的客戶訂購的距離，然後我想這只是附加率增加的函數，這讓你有信心，你將有另一個大的硬體方面的成長。我只是想確保我的想法是正確的。

No, I think you are. Yes, yes. I mean the business has great confidence in terms of what they're hearing from customers and customers' plans and budget plans. But I push back on the forecast and as you know, I mean, the hardware itself, from a purchasing perspective, has some degree of seasonality in it, like Q4 would always be bigger for purchasing activity from customers than in Q1. And now that we're down to more normal lead times, you kind of have that growth quarter-over-quarter built into the forecast. Now again, I've been conservative in the second half on that forecast. But still even with my conservatism, I still have second half being higher than the first half of hardware.

不，我想你是。是的是的。我的意思是，企業對從客戶那裡聽到的資訊以及客戶的計劃和預算計劃充滿信心。但我反駁了這個預測，正如你所知，我的意思是，從購買的角度來看，硬體本身俱有一定程度的季節性，例如第四季度的客戶購買活動總是比第一季更大。現在我們的交貨時間已經變得更加正常，您可以將季度環比的成長納入預測中。現在，我對下半年的預測再次持保守態度。但即使我很保守，我仍然認為下半年的硬體水準高於上半年。

Your final question comes from Joe Vruwink with Baird.

您的最後一個問題來自 Joe Vruwink 和 Baird。

Just a follow-up on some of the earlier questions. So I think of your growth is being tied to the R&D budgets at your customers, not the revenue at your customers and certainly, R&D budgets, they tend to move around more steadily perhaps. And then Anirudh, you mentioned earlier, a lot of your revenue is ratable at the same time. So basically, changes can take some time to work through the model. I just wanted to ask, though, because I think 2024 has the potential to see a pretty big inflection in R&D spending within the semi customer base? If you are maybe seeing that, a, is it included in your outlook starting the year and then b, if it does end up moving higher and influencing kind of renewals and purchasing decisions, does that actually manifest in a bigger way, probably more in 2025 than it really would in 2024?

只是一些早期問題的跟進。因此，我認為您的成長與客戶的研發預算有關，而不是與客戶的收入有關，當然，研發預算可能會更穩定地移動。然後，阿尼魯德，您之前提到過，您的許多收入都是同時需要評估的。所以基本上，更改可能需要一些時間才能完成模型。不過，我只是想問，因為我認為 2024 年半成品客戶群的研發支出有可能出現相當大的變化？如果你可能看到，a，它是否包含在你今年開始的展望中，然後b，如果它最終確實走高並影響續約和購買決策，那麼這實際上是否以更大的方式體現出來，可能更多地體現在2025 年會比 2024 年嗎？

Yes, Joe, that's a very good observation. I mean, definitely, the -- we are -- like we are very diversified, we are very ratable, we are tied to R&D, which are all good things in our model. And then the mood seems to be changing a little bit, '23, as we have mentioned before, was a tough environment, though we kind of grew very well. And there was some change I feel in Q4 in the overall -- I mean, you guys know that as well in the overall macro sentiment and maybe there will be more investment in '24 and '25. But I think we based our outlook and John can comment more on the backlog that we see rather than guessing what will happen in '24 and '25. But if there is an improvement in R&D, then that's good for our business. But we do see there's a lot of design activity. And then we see our position improving EDA and IP especially this year and continue expanding in SDA and AI.

是的，喬，這是一個非常好的觀察。我的意思是，我們確實非常多元化，我們的評級非常高，我們與研發緊密相連，這些在我們的模式中都是好事。然後情緒似乎發生了一些變化，正如我們之前提到的，23 年是一個艱難的環境，儘管我們成長得很好。我感覺到第四季總體上發生了一些變化——我的意思是，你們也知道整體宏觀情緒也發生了變化，也許 24 和 25 年會有更多投資。但我認為我們基於我們的前景，約翰可以對我們看到的積壓工作進行更多評論，而不是猜測 24 和 25 年會發生什麼。但如果研發有所改善，那麼這對我們的業務有好處。但我們確實看到有很多設計活動。然後我們看到我們的地位正在改善 EDA 和 IP，尤其是今年，並繼續在 SDA 和 AI 領域擴張。

Yes, certainly, everyone feels seems to be more optimistic this time this year compared to this time last year. This time last year, everyone was asking me, when was the recession going to happen. But this year, design activity seems to be strong. Even when we talk about China, we're still seeing strong design activity in China, but I derisk the guide for that because part of the large outperformance in China last year in achieving 17% of our revenue was because of that hardware backlog. And now that we're back to more normal lead times, we thought it's prudent to assume that China revenue drops back to prior levels of between kind of 14%, 15%. But -- so that's embedded in the guide. I thought the right -- I mean we always -- the approach at this time of the year is always tried to derisk the guide for the things that we think people might be concerned about, but -- and then have the business focused on doing the best business with customers for the long term that we always feel our Cadence employees do the best business when they're not chasing.

是的，當然，今年這個時候大家都覺得比去年這個時候更樂觀。去年的這個時候，每個人都在問我，經濟衰退什麼時候會發生。但今年，設計活動似乎很活躍。即使當我們談論中國時，我們仍然看到中國的設計活動很活躍，但我對此不以為意，因為去年中國的表現出色，占我們收入的 17%，部分原因是硬體積壓。現在我們已經回到了更正常的交貨時間，我們認為謹慎的假設是中國的收入回落到之前的水平，即 14% 到 15% 之間。但是——所以這已經嵌入到指南中了。我認為正確的 - 我的意思是我們總是 - 每年這個時候的方法總是試圖消除我們認為人們可能關心的事情的指南的風險，但是 - 然後讓業務專注於做從長遠來看，與客戶的最佳業務是我們總是認為我們的Cadence 員工在不追逐的時候會做最好的業務。

Okay. Yes, I think that's all smart. And then I guess, John, just on kind of your approach to forecasting the upfront revenues. I think in 3Q, you were kind of intimating that, look, we're running at kind of an elevated share of total. We haven't typically been 15% coming from upfront products, so maybe it normalizes. And now it's changing and suddenly it's going to remain a higher share of total. Can you just go into what changed in 4Q? And is any of that kind of AI, obviously, verification hardware, I mean these AI designs basically need the cutting edge is AI acutely being seen in the strength of your hardware order activity?

好的。是的，我認為這很聰明。然後我想，約翰，只是關於你預測前期收入的方法。我認為在第三季度，你有點暗示，看，我們在總數中所佔的份額有所提高。我們通常不會有 15% 來自前期產品，所以也許它會正常化。現在它正在發生變化，突然間它將在總數中保持較高的份額。能談談第四季發生了什麼變化嗎？顯然，任何一種人工智慧驗證硬件，我的意思是這些人工智慧設計基本上都需要尖端技術，人工智慧是否在您的硬體訂單活動的強度中得到了敏銳的體現？

Yes, yes, of course. That's -- and partly, it's -- I mean, if you've seen over the last number of years, we've seen the upfront contribution to our revenue mix has been increasing, and it went from 15% in '22 to 16% last year. And I think what you're referring to is we expect it to go to 17.5% this year. That's a virtue of an expectation that we're going to have another record hardware revenue year that we expect stronger IP growth this year compared to last. We feel much more confident in the contribution from IP growth and of course, we're launching new products all the time.

是的，是的，當然。那是——部分是——我的意思是，如果你在過去的幾年裡看到過，我們已經看到對我們收入組合的前期貢獻一直在增加，從 22 年的 15% 上升到 16 年％ 去年。我認為你指的是我們預計今年這一比例將達到 17.5%。這是因為我們預計今年的硬體收入將再創新高，我們預計今年的 IP 成長將比去年更強勁。我們對知識產權成長的貢獻更有信心，當然，我們一直在推出新產品。

Now in relation to things like Millennium, we expect a large part of Millennium sales to be cloud-based but maybe not all of them will be cloud-based. I think that's another tailwind potentially for upfront revenue for the year. But I've hedged back slightly, what I expect in the second half because I'd like to see the pipeline in the summer before we take that up even higher. But the forecast is higher than 17.5%, but I'm only comfortable going out with a guide of 17.5% for upfront revenue for this year.

現在，對於像 Millennium 這樣的產品，我們預計 Millennium 銷售額的很大一部分將基於雲，但也許並非全部都是基於雲端的。我認為這是今年預付費用的另一個潛在推動因素。但我已經稍微對沖了我對下半年的預期，因為我希望在夏天看到管道，然後再把它推得更高。但預測高於 17.5%，但我只願意接受今年預付 17.5% 的指導。

And just to add, I mean, AI contributes to -- I mean, AI design activity, as you know, contributes to hardware strength, given our strong position. And also AI is more HPC and chiplet-based and it does help our IP business as well, and then all the comments on Millennium. So -- but let's see how it progresses. But yes, I mean, the IP is also strong this year, along with hardware and Millennium.

補充一點，我的意思是，人工智慧有助於——我的意思是，鑑於我們的強勢地位，正如你所知，人工智慧設計活動有助於增強硬體實力。而且人工智慧更多的是基於 HPC 和小晶片，它確實也有助於我們的 IP 業務，然後是關於 Millennium 的所有評論。那麼，讓我們看看進展如何。但是，是的，我的意思是，今年的 IP 以及硬體和 Millenium 也很強大。

I will now turn it back to Anirudh Devgan for closing remarks.

現在我將把它轉回給阿尼魯德·德夫甘 (Anirudh Devgan) 作結束語。

Yes. Thank you all for joining us this afternoon. It's an exciting time for Cadence as we enter 2024 with product leadership and strong business momentum. Our continued execution of the Intelligent System Design strategy, customer-first mindset and a high-performance and inclusive culture are driving accelerating growth as we grow our core EDA business, while expanding our portfolio. Fortune and Great Place to Work named Cadence as one of the World's Best Workplaces in 2023, ranking it #9. And on behalf of our employees and our Board of Directors, we thank our customers, partners and investors for their continued trust and confidence in Cadence.

是的。感謝大家今天下午加入我們。對於 Cadence 來說，這是一個激動人心的時刻，我們憑藉產品領先地位和強勁的業務勢頭進入 2024 年。隨著我們發展核心 EDA 業務並擴大我們的產品組合，我們持續執行智慧系統設計策略、客戶至上的思維方式以及高效能和包容性文化，正在推動我們的加速成長。 《財星》雜誌和 Great Place to Work 將 Cadence 評為 2023 年全球最佳工作場所之一，排名第 9。我們代表我們的員工和董事會，感謝我們的客戶、合作夥伴和投資者對 Cadence 的持續信任和信心。

Thank you for participating in today's Cadence Fourth Quarter and Fiscal Year 2023 Earnings Conference Call. This concludes today's call. You may now disconnect.

感謝您參加今天的 Cadence 第四季和 2023 財年財報電話會議。今天的電話會議到此結束。您現在可以斷開連線。