益華電腦 (CDNS) 2024 Q1 法說會逐字稿

Good afternoon. My name is Regina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Cadence First Quarter 2024 Earnings Conference Call. (Operator Instructions)

午安.我叫雷吉娜，今天我將擔任你們的會議操作員。此時，我歡迎大家參加 Cadence 2024 年第一季財報電話會議。 （操作員說明）

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

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

Thank you, operator. I'd like to welcome everyone to our first quarter of 2024 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 2024 年第一季財報電話會議。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'll present certain non-GAAP measures, which should not be considered in isolation from or as a substitute for GAAP results. Reconciliations of GAAP to non-GAAP measures are included in today's earnings release. For the Q&A session today, we would ask that you observe a limit of 1 question and 1 follow-up.

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。公認會計原則與非公認會計原則衡量標準的調節包含在今天的收益發布中。對於今天的問答環節，我們要求您遵守 1 個問題和 1 次跟進的限制。

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 had a strong start to the year, delivering solid results for the first quarter of 2024. We came in at the upper end of our guidance range on all key financial metrics and are raising our financial outlook for the year.

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 今年開局強勁，在 2024 年第一季度取得了穩健的業績。

We exited Q1 with a better-than-expected record backlog of $6 billion, which sets us up nicely for the year and beyond. John will provide more details in a moment.

第一季結束時，我們的積壓訂單達到了 60 億美元，好於預期，這為我們今年及以後的發展奠定了良好的基礎。約翰稍後將提供更多詳細資訊。

Long-term trends of hyperscale computing, autonomous driving and 5G, all turbocharged by AI super cycle are fueling strong broad-based design activity. We continue to execute our long-standing intelligent system design strategy as we systematically build out our portfolio to deliver differentiated end-to-end solutions to our growing customer base.

超大規模運算、自動駕駛和 5G 的長期趨勢均由人工智慧超級週期推動，正在推動強大的廣泛設計活動。我們繼續執行我們長期的智慧系統設計策略，系統地建立我們的產品組合，為不斷增長的客戶群提供差異化的端到端解決方案。

Technology leadership is foundational to Cadence. And we are excited by the momentum of our product advancement over the last few years and the promise of our newly unveiled products. Generative AI is reshaping the entire chip and system development process. And our Cadence.AI portfolio provides customers with the most comprehensive and impactful solutions for chip-to-systems intelligent design acceleration.

技術領先是 Cadence 的基礎。我們對過去幾年產品進步的勢頭以及新推出的產品的承諾感到興奮。生成式人工智慧正在重塑整個晶片和系統開發流程。我們的 Cadence.AI 產品組合為客戶提供最全面、最具影響力的晶片到系統智慧設計加速解決方案。

Built upon AI-enhanced core design engine, our GenAI solution boosted by foundational LLM copilot are delivering unparalleled productivity, quality of results and time-to-market benefits for our customers. Last week, at Cadence Live Silicon Valley, several customers, including Intel, Broadcom, Qualcomm, Juniper and ARM shared their remarkable successes with solutions in our Cadence.AI portfolio.

我們的 GenAI 解決方案以人工智慧增強的核心設計引擎為基礎，由基礎法學碩士副駕駛推動，為我們的客戶提供無與倫比的生產力、結果品質和上市時間優勢。上週，在 Cadence Live Silicon Valley 上，包括英特爾、博通、高通、瞻博網路和 ARM 在內的多家客戶分享了他們在 Cadence.AI 產品組合中的解決方案取得的顯著成功。

Last week, we launched our third-generation Dynamic Duo, the Palladium Z3 emulation and Protium X3 prototyping platform to address the insatiable demand for higher performance and increased capacity hardware-accelerated verification solutions. Building upon the successes of the industry-leading Z2 X2 systems, this new platform set a new standard of excellence, delivering more than twice the capacity and 50% higher performance per rack than the previous generation.

上週，我們推出了第三代 Dynamic Duo、Palladium Z3 模擬和 Protium X3 原型平台，以滿足對更高效能和更大容量硬體加速驗證解決方案的永不滿足的需求。該新平台以業界領先的 Z2 X2 系統的成功為基礎，樹立了新的卓越標準，與上一代產品相比，每個機架的容量增加了一倍以上，性能提高了 50%。

Palladium Z3 is powered by our next-generation custom processor and was designed with Cadence.AI tools and IP. The Z3 system is future-proof with its massive 48 billion gate capacity, enabling emulation of the industry's largest design for the next several generations.

Palladium Z3 由我們的下一代客製化處理器提供支持，並採用 Cadence.AI 工具和 IP 進行設計。 Z3 系統具有面向未來的 480 億門容量，能夠在未來幾代中模擬業界最大的設計。

The Z3 X3 systems have been deployed at select customers and were endorsed by NVIDIA, ARM and AMD at launch. We also introduced the Cadence Reality Digital Twin Platform, which virtualizes the entire data center and uses AI, high-performance computing and physics-based simulation to significantly improve data center energy efficiency by up to 30%.

Z3 X3 系統已在選定的客戶中部署，並在發佈時獲得了 NVIDIA、ARM 和 AMD 的認可。我們也推出了Cadence Reality Digital Twin Platform，該平台虛擬化整個資料中心，並利用人工智慧、高效能運算和基於實體的仿真，顯著提高資料中心能源效率高達30%。

Additionally, Cadence's cloud-native molecular design platform, Orion will be supercharged with NVIDIA's BioNeMo and NVIDIA microservices for drug discovery to broaden therapeutic design capabilities and shorten time to trusted results.

此外，Cadence 的雲端原生分子設計平台 Orion 將配備 NVIDIA BioNeMo 和 NVIDIA 藥物發現微服務，以擴大治療設計能力並縮短獲得可信賴結果的時間。

In Q1, we expanded our footprint at several top-tier customers and furthered our relationship with key ecosystem partners. We deepened our partnership with IBM across our core EDA and systems portfolio, including a broad proliferation of our digital analog and verification software and expansion of our 3D-IC packaging and system analysis solutions.

在第一季度，我們擴大了在幾個頂級客戶中的覆蓋範圍，並進一步加強了與主要生態系統合作夥伴的關係。我們在核心 EDA 和系統產品組合方面深化了與 IBM 的合作夥伴關係，包括數位模擬和驗證軟體的廣泛推廣以及 3D-IC 封裝和系統分析解決方案的擴展。

We strengthened our collaboration with GlobalFoundries through a significant expansion of our EDA and system solutions. That will enable GF to develop key digital analog RF mmWave and silicon photonics design for aerospace and defense, IoT and automotive end markets. We announced a collaboration with Arm to develop a chiplet-based reference design and software development platform to accelerate software-defined vehicle innovation.

我們透過大幅擴展 EDA 和系統解決方案，加強了與 GlobalFoundries 的合作。這將使格芯能夠為航空航太和國防、物聯網和汽車終端市場開發關鍵的數位類比射頻毫米波和矽光子設計。我們宣布與 Arm 合作開發基於小晶片的參考設計和軟體開發平台，以加速軟體定義的車輛創新。

We also further extended our strategic partnership with Dassault Systemes, integrating our AI-driven PCB solutions with Dassault's 3DEXPERIENCE Works portfolio, enabling up to a 5x reduction in design turnaround time for SOLIDWORKS customers.

我們還進一步擴展了與達梭系統的策略合作夥伴關係，將我們的 AI 驅動的 PCB 解決方案與達梭的 3DEXPERIENCE Works 產品組合相集成，使 SOLIDWORKS 客戶的設計週轉時間最多縮短 5 倍。

Now let's talk about our key highlights for Q1. Increasing system complexity and growing hyper convergence between the electrical, mechanical and physical domain is driving the need for tightly integrated core design and analysis solutions.

現在讓我們來談談第一季的主要亮點。不斷增加的系統複雜性以及電氣、機械和物理領域之間不斷增長的超融合正在推動對緊密整合的核心設計和分析解決方案的需求。

Our system design and analysis business delivered steady growth as our AI-driven design optimization platforms integrated with our physics-based analysis solutions continue delivering superior results across multiple end markets. Over the past 6 years, we have methodically built out our system analysis portfolio. And with the signing of the definitive agreement to acquire BETA CAE are now extending it to structural analysis, thereby unlocking a multibillion dollar TAM opportunity.

我們的系統設計和分析業務實現了穩定成長，因為我們的人工智慧驅動的設計最佳化平台與基於物理的分析解決方案相集成，繼續在多個終端市場提供卓越的結果。在過去的 6 年裡，我們有條不紊地建構了我們的系統分析產品組合。隨著收購 BETA 的最終協議的簽署，CAE 現在將其擴展到結構分析，從而釋放了數十億美元的 TAM 機會。

BETA CAE's leading solutions have a particularly strong footprint in the automotive and aerospace verticals, including at customers such as Stellantis, General Motors, Renault and Lockheed Martin.

BETA CAE 的領先解決方案在汽車和航太垂直領域擁有特別強大的影響力，包括 Stellantis、通用汽車、雷諾和洛克希德馬丁等客戶。

Our Millennium supercomputing platform, delivering phenomenal performance and scalability for high fidelity simulation is ramping up nicely. In Q1, a leading automaker expanded its production deployment of Millennium to multiple groups. After a successful early access program, in which it realized tremendous performance benefits.

我們的 Millennium 超級運算平台為高保真模擬提供了驚人的效能和可擴展性，正在快速發展。第一季度，一家領先的汽車製造商將 Millennium 的生產部署擴大到多個集團。在成功實施早期存取計劃後，它實現了巨大的效能優勢。

Allegro X continued its momentum and is now deployed at well over 300 customers, while Allegro X AI, the industry's first fully automated PCB design engine is enabling customers to realize significant 4 to 10x productivity gain. Samsung used Celsius Studios to uncover early design and analysis insight to precise and rapid thermal simulation for 2.5D and 3D packages attaining up to a 30% improvement in product development time. And a leading Asian mobile chip company use Optimality Intelligence System Explorer AI technology and Clarity 3D Solver obtaining more than 20x design productivity improvement.

Allegro X 繼續保持其勢頭，目前已在 300 多家客戶中部署，而業界首款全自動 PCB 設計引擎 Allegro X AI 使客戶的生產力顯著提高 4 至 10 倍。三星利用攝氏工作室揭示了早期設計和分析見解，以實現 2.5D 和 3D 封裝的精確快速熱模擬，從而將產品開發時間縮短了 30%。一家領先的亞洲行動晶片公司使用 Optimality Intelligence System Explorer AI 技術和 Clarity 3D Solver 獲得超過 20 倍的設計生產力提升。

Ever increasing complexities in the system verification and software bring up continue to propel the demand of our functional verification products. With hardware-accelerated verification now a must-have part of the customer design flow. On the heels of a record year, our hardware products continue to proliferate at existing customers while also gaining some notable competitive wins, including at a leading networking company and at a major automotive semiconductor supplier.

系統驗證和軟體的複雜性不斷增加，繼續推動我們功能驗證產品的需求。硬體加速驗證現在已成為客戶設計流程的必備部分。在創紀錄的一年之後，我們的硬體產品在現有客戶中繼續激增，同時也贏得了一些顯著的競爭勝利，包括一家領先的網路公司和一家主要的汽車半導體供應商。

Demand for hardware was broad-based with the particular strength seen at hyperscalers and over 85% of the orders during the quarter included both platforms. Our Verisium platform that leverages big data and AI to optimize verification workloads, boost coverage and accelerate root cause analysis of bugs saw accelerating customer adoption. At CadenceLIVE Silicon Valley, Qualcomm said that they use Verisium stim AI to increase total design coverage automatically while getting up to a 20x reduction in verification workload run time.

對硬體的需求基礎廣泛，超大規模企業表現尤為強勁，本季超過 85% 的訂單都包含這兩個平台。我們的 Verisium 平台利用大數據和人工智慧來優化驗證工作負載、擴大覆蓋範圍並加速錯誤的根本原因分析，從而加速了客戶的採用。在矽谷的 CadenceLIVE 上，高通表示，他們使用 Verisium stim AI 自動提高整體設計覆蓋率，同時將驗證工作負載運行時間縮短 20 倍。

Our digital IC business had another solid quarter as our digital full flow continued to proliferate at the most advanced nodes. We had strong growth at hyperscalers, and over 50 customers have deployed our digital solutions on 3-nanometer and below design. Cadence Cerebrus, which leverages GenAI to intelligently optimize the digital full flow in a fully automatic manner now has been used in well over 350 tapeouts. Delivering best-in-class PPA and productivity benefits. It's fast becoming integral part of the design flow at marquee customers, as well as in [deep TCO] flows for new process nodes at multiple foundries.

隨著我們的數位全流程在最先進的節點上繼續激增，我們的數位 IC 業務又迎來了一個穩健的季度。我們在超大規模領域取得了強勁成長，超過 50 家客戶已在 3 奈米及以下設計上部署了我們的數位解決方案。 Cadence Cerebrus 利用 GenAI 以全自動方式智慧優化數位全流程，現已用於超過 350 個串流片。提供一流的 PPA 和生產力優勢。它正迅速成為大客戶設計流程以及多個代工廠新製程節點的[深度 TCO] 流程中不可或缺的一部分。

In custom IC business, Virtuoso Studio, delivering AI-powered layout automation and optimization continued (inaudible) strongly, and 18 of the top 20 semi have migrated to this new release in its first year. Our IP business continued to benefit from market opportunities offered by AI and multi chiplet-based architecture. We are seeing strong momentum in interface IPs that are essential to AI use cases, especially HBM, DDR, UCIe and PCIe at leading edge nodes.

在客製化 IC 業務中，Virtuoso Studio 提供人工智慧驅動的佈局自動化和優化繼續強勁（聽不清楚），排名前 20 的半成品中有 18 家在第一年就遷移到了這個新版本。我們的IP業務持續受益於人工智慧和基於多小晶片的架構所提供的市場機會。我們看到對人工智慧用例至關重要的介面 IP 的強勁發展勢頭，尤其是領先邊緣節點的 HBM、DDR、UCIe 和 PCIe。

In Q1, we partnered with Intel foundry to provide design software and leading IP solutions at multiple Intel advanced nodes. Our Tensilica business reached a major milestone of 200 software partners in the HiFi ecosystem, the de facto standard for automotive infotainment and home entertainment. And we extended our partnership with one of the top hyperscalers in its custom silicon SoC design with our Xtensa NX controller.

第一季度，我們與英特爾代工廠合作，在多個英特爾先進節點上提供設計軟體和領先的 IP 解決方案。我們的 Tensilica 業務在 HiFi 生態系統（汽車資訊娛樂和家庭娛樂的事實上的標準）中達到了 200 個軟體合作夥伴的重要里程碑。我們透過 Xtensa NX 控制器擴展了與頂級超大規模供應商之一在其客製化矽 SoC 設計方面的合作關係。

In summary, I'm pleased with our Q1 results and the continuing momentum of our business. (inaudible) chip and system design complexity and the tremendous potential of AI-driven automation offer massive opportunities for our computational software to help customers realize these benefits.

總之，我對我們第一季的業績和業務的持續成長勢頭感到滿意。 （聽不清楚）晶片和系統設計的複雜性以及人工智慧驅動的自動化的巨大潛力為我們的計算軟體提供了巨大的機會，可以幫助客戶實現這些優勢。

In addition to our strong business results, I am proud of our high-performance inclusive culture and thrilled that Cadence was named by Fortune and Great Place to Work as one of the 2024's 100 Best Companies to Work For, ranking #9.

除了我們強勁的業務成果之外，我還為我們的高績效包容性文化感到自豪，並且很高興Cadence 被《財富》雜誌和《最佳工作場所》評為2024 年100 家最佳工作公司之一，排名第9。

Now I will turn it over to John to provide more details on the Q1 results and our updated 2024 outlook.

現在我將把它交給 John，以提供有關第一季業績和我們更新的 2024 年展望的更多詳細資訊。

Thanks, Anirudh, and good afternoon, everyone. I am pleased to report that Cadence delivered strong results for the first quarter of 2024. First quarter bookings were a record for Q1, and we achieved record Q1 backlog of approximately $6 billion. A good start to the year, coupled with some impressive new product launches, sets us up for strong growth momentum in the second half of 2024.

謝謝阿尼魯德，大家午安。我很高興地向大家報告，Cadence 在2024 年第一季取得了強勁的業績。億美元。今年的良好開局，加上一些令人印象深刻的新產品發布，為我們在 2024 年下半年實現強勁增長勢頭奠定了基礎。

Here are some of the financial highlights from the first quarter, starting with the P&L. Total revenue was $1.09 billion. GAAP operating margin was 24.8%, and non-GAAP operating margin was 37.8%. GAAP EPS was $0.91 and non-GAAP EPS was $1.17.

以下是第一季的一些財務亮點，從損益表開始。總收入為 10.9 億美元。 GAAP 營業利益率為 24.8%，非 GAAP 營業利益率為 37.8%。 GAAP 每股收益為 0.91 美元，非 GAAP 每股收益為 1.17 美元。

Next, turning to the balance sheet and cash flow. Cash balance at quarter end was $1.012 billion, while the principal value of debt outstanding was $650 million. Operating cash flow was $253 million. DSOs were 36 days, and we used $125 million to repurchase Cadence shares in Q1.

接下來，轉向資產負債表和現金流量。季末現金餘額為 10.12 億美元，未償債務本金為 6.5 億美元。營運現金流為 2.53 億美元。 DSO 為期 36 天，我們在第一季使用了 1.25 億美元回購了 Cadence 股票。

Before I provide our updated outlook, I'd like to share some assumptions that are embedded in our outlook.

在提供最新的展望之前，我想先分享我們的展望中所包含的一些假設。

Given the recent launch of our new hardware systems, we expect the shape of hardware revenue in 2024 to weigh more towards the second half as our team works to build inventory of the new system. Our updated outlook does not include the impact of our pending BETA CAE acquisition, and it contains the usual assumption that export control regulations that exist today remain substantially similar for the remainder of the year.

鑑於我們最近推出了新的硬體系統，隨著我們的團隊努力建立新系統的庫存，我們預計 2024 年下半年的硬體收入將更加重要。我們更新的展望不包括我們即將進行的 BETA CAE 收購的影響，並且包含通常的假設，即目前存在的出口管制法規在今年剩餘時間內保持基本相似。

Our updated outlook for fiscal 2024 is revenue in the range of $4.56 billion to $4.62 billion. GAAP operating margin in the range of 31% to 32%. Non-GAAP operating margin in the range of 42% to 43%. GAAP EPS in the range of $4.04 to $4.14. Non-GAAP EPS in the range of $5.88 to $5.98.

我們對 2024 財年的最新展望是營收在 45.6 億美元至 46.2 億美元之間。 GAAP 營業利潤率介於 31% 至 32% 之間。非 GAAP 營業利潤率在 42% 至 43% 之間。 GAAP 每股收益在 4.04 美元至 4.14 美元之間。非 GAAP 每股收益在 5.88 美元至 5.98 美元之間。

Operating cash flow in the range of $1.35 billion to $1.45 billion. And we expect to use at least 50% of our annual free cash flow to repurchase Cadence shares. With that in mind, for Q2, we expect revenue in the range of $1.03 billion to $1.05 billion. GAAP operating margin in the range of 26.5% to 27.5%, non-GAAP operating margin in the range of 38.5% to 39.5%. GAAP EPS in the range of $0.73 to $0.77, non-GAAP EPS in the range of $1.20 to $1.24.

營運現金流在 13.5 億美元至 14.5 億美元之間。我們預計將使用至少 50% 的年度自由現金流來回購 Cadence 股票。考慮到這一點，我們預計第二季的營收將在 10.3 億美元至 10.5 億美元之間。 GAAP 營業利潤率在 26.5% 至 27.5% 範圍內，非 GAAP 營業利潤率在 38.5% 至 39.5% 範圍內。 GAAP 每股收益為 0.73 美元至 0.77 美元，非 GAAP 每股收益為 1.20 美元至 1.24 美元。

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.

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 summary, Cadence continues to lead with innovation and is on track for a strong 2024 as we execute to our intelligent system design strategy.

總而言之，Cadence 繼續引領創新，並在我們執行智慧系統設計策略的同時，預計在 2024 年實現強勁成長。

I'd like to close by thanking our customers, partners and our employees for their continued support.

最後，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 the line of Joe Vruwink with Baird.

（操作員說明）您的第一個問題來自 Joe Vruwink 和 Baird 的線路。

Maybe just to start with your outlook for the year. Can you perhaps provide maybe your second half assumption before this quarter versus where it stands today in terms of just recalibrating around delivery schedules. And maybe a good way to frame it, I think in the past, you gave a share of this year's revenue that was going to come from upfront products. Is that still the right range, but if it is the right range, you can obviously see more is going to end up landing in the second half. And so that kind of puts to your original views? Or how is that, I guess, skewed relative to what might have been the expectation a quarter ago?

也許只是從您對今年的展望開始。您能否提供本季之前的下半年假設以及目前在圍繞交付計劃進行重新調整方面的情況。也許是一個很好的框架方式，我認為在過去，您提供了今年收入的一部分，該收入將來自前期產品。這仍然是正確的範圍嗎？那麼這是否符合您最初的觀點？或者，我猜，這與一個季度前的預期相比有何偏差？

It's a great question, Joe. And I think you've hit on the main point there. But upfront revenue driving a lot of the quarter-over-quarter trends this year. But when I look at last year, you recall that we had a large backlog of hardware orders, and we dedicated 100% of the hardware production in Q1 to deliver that hardware in Q1 2023. As a result, in Q1 2023, 20% of our Q1 '23 revenue was from upfront revenue sources. But in contrast, Q1 this year, it's only 10% of the total revenue for this Q1 is coming from upfront revenue.

這是一個很好的問題，喬。我認為你已經抓住了要點。但預付費用收入推動了今年季度環比的趨勢。但當我回顧去年時，你會記得我們有大量積壓的硬體訂單，我們將第一季硬體生產的100% 用於在2023 年第一季交付該硬體。 %我們 23 年第一季的營收來自前期收入來源。但相較之下，今年Q1，只有10%的總收入來自預付費用。

But again last year and to reflect on where we thought we were this time last quarter, but we still expect that upfront revenue will probably be 15% to 20%, I mean, in and around the midpoint there is 17.5% and expectation for upfront revenue this year and a midpoint of, say, 82.5% for recurring revenue. That's still the same as what we thought this time last quarter. But that contrast with last year was, I think, 16% of our revenue was up front last year.

但去年再次反思我們對上季度這個時候的預期，但我們仍然預計預付費用可能為 15% 至 20%，我的意思是，在中點及其附近，預付費用的預期為 17.5%今年的收入和經常性收入的中點為82.5%。這仍然與我們上季度此時的想法相同。但我認為，與去年相比，去年我們的收入中有 16% 是預付的。

And to put dollar terms on it, last year, $650 million of our revenue was upfront. This year, we're expecting roughly $800 million to be upfront. The first half versus first half last year, we had 350 in the first half and 300 in the second half because we had prioritized all those shipments in hardware and that skewed the numbers towards the first half last year, so 350 and 300, ending with the 650 of upfront revenue last year. This year, it looks more like 250 and 550 at the back end.

以美元計算，去年我們的收入中有 6.5 億美元是預付款。今年，我們預計預付款約為 8 億美元。上半年與去年上半年相比，我們上半年有350 台，下半年有300 台，因為我們優先考慮了所有硬體出貨量，這使得去年上半年的數量偏向了，所以分別是350 台和300台，最後以去年預付收入為 650。今年，後端看起來更像是250和550。

But I know that's largely as a result of -- we had a record backlog, our record bookings quarter in Q1. We've got substantial backlog in IP that we're scaling up to deliver. A lot of that revenue falls into the second half. And also, we launched these new hardware systems last week hardware revenue is expected to be more second half weighted now because based on what we've heard, and I'll let Anirudh chime in here on the technical aspects of the new hardware systems, but we expect them to be so popular, but a lot of demand will shift to those new hardware systems, and we'll have to ramp up production to be able to deliver that demand. So it shifts some of the upfront revenue to the second half.

但我知道這很大程度上是因為——我們的積壓量創歷史新高，第一季的預訂量創歷史新高。我們有大量積壓的智慧財產權，我們正在擴大交付規模。大部分收入都落在下半年。而且，我們上週推出了這些新的硬體系統，預計下半年硬體收入將更加重要，因為根據我們所聽到的情況，我將讓 Anirudh 在這裡插話一下新硬體系統的技術方面，但我們預計它們會如此受歡迎，但大量需求將轉向這些新的硬體系統，我們必須提高產量才能滿足該需求。因此它將部分前期收入轉移到下半年。

So I think upfront revenue is really driving a lot of the skewed metrics. Anirudh, do you want to talk about Z3?

因此，我認為前期收入確實推動了許多指標的偏差。 Anirudh，你想談 Z3 嗎？

Yes, absolutely. So we are very proud of the new systems we launched. As you know, we are a leader in hardware-based emulations with Z2 X2. And last time we launched them was in 2021. So that was like a 6-year cycle, Z1 X1 was 2015, and then Z2 X2 was '21. So what I'm particularly pleased about is we have a major, major refresh. It's a game-changing product, but it was also developed in only 3 years. So in 2024, we have a new refresh. And it's a significant leap in terms of capacity. And even last week at our CadenceLIVE conference, NVIDIA and Jensen talked about how they use Z2 to design their latest chip like Blackwell, and it's also used by all the major silicon companies and system companies to design their chips.

是的，一點沒錯。因此，我們對我們推出的新系統感到非常自豪。如您所知，我們是 Z2 X2 基於硬體的模擬領域的領導者。上次我們推出它們是在 2021 年。所以我特別高興的是我們進行了重大更新。這是一款改變遊戲規則的產品，但它的開發也只花了三年。所以在 2024 年，我們有一個新的刷新。這在容量方面是一個重大飛躍。甚至在上週的 CadenceLIVE 會議上，NVIDIA 和 Jensen 也談到了他們如何使用 Z2 來設計他們最新的晶片（如 Blackwell），所有主要的晶片公司和系統公司也都使用 Z2 來設計他們的晶片。

But what is truly exciting about Z3 and X3 is this a big leap. It's like Z3 is 4x, 5x more capacity than Z2, it's a much higher performance. So it sets us up nicely for the next several years to be able to design the several generations of the world's largest chips, okay? So that's the right thing to do. The reason we can do it in 3 years versus 6 years is we use our own design internally in Cadence for TSMC advanced node. So we're using all our latest tools or the latest AI tools.

但 Z3 和 X3 真正令人興奮的是這是一個巨大的飛躍。就好像Z3的容量是Z2的4倍、5倍，性能更高。因此，這為我們在未來幾年能夠設計幾代世界上最大的晶片奠定了良好的基礎，好嗎？所以這是正確的做法。我們之所以能在 3 年而不是 6 年時間內做到這一點，是因為我們在 Cadence 內部為 TSMC 高階節點使用了我們自己的設計。因此，我們正在使用所有最新的工具或最新的人工智慧工具。

We are using all our IP. There's a very good validation of our own capabilities that we can accelerate our design process, but really sets up hardware verification on overall verification flow for using the new systems. Now as a result, normally, there is a transition period when you have a new system, and we went through that twice already in the last 10 years and the customers naturally will go to the new systems and then we build them over next 1 or 2 quarters. But that is the right thing to do for the business long term.

我們正在使用我們所有的IP。我們自己的能力得到了很好的驗證，我們可以加速我們的設計流程，但真正在使用新系統的整體驗證流程上建立了硬體驗證。現在的結果是，通常情況下，當你擁有一個新系統時，會有一個過渡期，我們在過去10 年裡已經經歷了兩次這樣的過渡期，客戶自然會轉向新系統，然後我們在接下來的1 或1 年中構建它們2 個季度。但從長遠來看，這是正確的做法。

It's good to accelerate the because these AI chips are getting bigger and bigger, right? So the demand for emulation is getting bigger and bigger, and I can give you more stats later. So we felt that it was important to accelerate the development of the next-generation system to get ready for this coming AI wave for next several years, and we are very well positioned. As a result, it does have some impact on quarter-to-quarter, but that's well worth it in the long run.

加速是件好事，因為這些人工智慧晶片變得越來越大，對吧？所以對模擬的需求越來越大，我稍後可以給你更多的統計。因此，我們認為加快下一代系統的開發，為未來幾年即將到來的人工智慧浪潮做好準備非常重要，而且我們已經做好了充分的準備。因此，它確實對季度影響有一些影響，但從長遠來看這是值得的。

That's all very helpful. Second question, I wanted to ask how some of the things you just spoke of, but also AI start to change the frequency of customers engaging with you how they approach renewals. So you brought up how the (inaudible) platforms, the velocity there has improved from first generation to next 6 years, now we're down to a 3-year new product cycle. When I listen to your customers last week talk about AI, they're not just generating ML models that can be reused, but then, of course, each run becomes better if you're incorporating prior feedback.

這一切都非常有幫助。第二個問題，我想問你剛才提到的一些事情以及人工智慧如何開始改變客戶與你互動的頻率以及他們如何進行續訂。因此，您提到了（聽不清楚）平台的速度從第一代到未來 6 年如何提高，現在我們的新產品週期已降至 3 年。當我上週聽你的客戶談論人工智慧時，他們不僅僅是產生可以重複使用的機器學習模型，而且，當然，如果你結合了先前的回饋，每次運行都會變得更好。

So it would just seem like AI itself not only creates stickiness, but there would be an incentive to deploy it maybe more broadly than a customer traditionally would think about deploying new products. Does that mean the average run rate of a renewal ends up becoming much bigger, and we'll start to see that flow in the backlog?

因此，人工智慧本身不僅會產生黏性，而且還會有動力將其部署得比客戶傳統上考慮部署新產品的範圍更廣泛。這是否意味著續訂的平均運行率最終會變得更大，並且我們將開始在積壓中看到這種流量？

Yes, that's the correct observation. As you know, what we have said before, AI has a lot of profound impact to Cadence, a lot of benefit to our customers. So there are 3 main areas. One is the build-out of the AI infrastructure, whether it's NVDIA or AMD or all the hyperscalers and we are fortunate to be working with all the leading AI companies. So that's the first part. And in that part, as they design bigger and bigger chips, because the big thing in AI systems is they are parallel, so they need to be bigger and bigger chips. So the tools have to be more efficient. The hardware platform have to support that and that's why the new systems.

是的，這是正確的觀察。如你所知，我們之前說過，人工智慧對Cadence有很多深遠的影響，為我們的客戶帶來很多好處。所以有3個主要領域。一是人工智慧基礎設施的構建，無論是 NVDIA、AMD 或所有超大規模企業，我們很幸運能夠與所有領先的人工智慧公司合作。這是第一部分。在這方面，隨著他們設計越來越大的晶片，因為人工智慧系統中最重要的是它們是並行的，所以它們需要越來越大的晶片。因此，工具必須更有效率。硬體平台必須支援這一點，這就是新系統的原因。

Now the second part of AI is applying AI to our own products, which is the Cadence.AI portfolio. And like you mentioned last week, we had several customers talking about success with that portfolio, including Intel -- like I mentioned, Intel, Broadcom, Qualcomm, Juniper, ARM. And the results are significant. So we are no longer in kind of a trial phase of whether these things will work. Now we're getting pretty significant improvements. Like we mentioned, MediaTek got like 6% power improvement. One of the hyperscale companies got 8% to 10% power improvement. These are significant numbers. So it is leading to deployment of our AI portfolio.

現在人工智慧的第二部分是將人工智慧應用到我們自己的產品中，這就是Cadence.AI產品組合。正如您上週提到的，我們有幾位客戶談論了該產品組合的成功，其中包括英特爾——就像我提到的，英特爾、博通、高通、瞻博網路、ARM。結果是顯著的。因此，我們不再處於這些東西是否有效的試驗階段。現在我們得到了相當顯著的改進。正如我們所提到的，MediaTek 的功耗提高了約 6%。其中一家超大規模公司的功率提高了 8% 到 10%。這些都是重要的數字。因此，這導致了我們人工智慧產品組合的部署。

And I think we mentioned like the AI run rate on a trailing 12-month basis is up 3x. Okay. And I think design process already was well automated. EDA has a history of automating design over the last 30 years. So AI is in a unique position because you need the base process to be somewhat automated to apply AI. So we were already well automated, and now AI can take you to the next level of automation.

我想我們提到過，過去 12 個月的人工智慧運作率成長了 3 倍。好的。我認為設計過程已經很好地自動化了。 EDA 在自動化設計方面已有 30 年的歷史。因此，人工智慧處於獨特的地位，因為你需要基本流程在某種程度上自動化才能應用人工智慧。所以我們已經實現了很好的自動化，現在人工智慧可以帶你進入新的自動化水平。

So that's the second part of AI, which I'm pretty pleased about is applying to our own product. And then the third part of AI proliferation is new markets that open up, which things like data center design, with Reality that we announced or Millennium, which is designing systems with acceleration or digital biology. Those are like a little -- they take a little longer to ramp up, but we have these 3 kind of impact of AI. The first being direct design of AI chips and systems; second, applying AI to our own products; and third, being new applications of AI.

這就是人工智慧的第二部分，我很高興將其應用到我們自己的產品中。人工智慧擴散的第三部分是開闢新市場，例如資料中心設計，我們宣布的現實或千禧年，它正在設計具有加速或數位生物學的系統。這些就像一點點——它們需要更長的時間才能提升，但我們有人工智慧的這三種影響。一是AI晶片和系統的直接設計；第二，將AI應用到我們自己的產品中；三是人工智慧的新應用。

Your next question will come from the line of Charles Shi with Needham & Company.

您的下一個問題將來自李約瑟公司的 Charles Shi。

I just wanted to ask about the China revenue in Q1, it looks pretty light. I just wonder whether that's part of the reason that's weighing on your Q2. I understand you mentioned that you're going to second gen to third gen hardware transition right now, maybe that's another factor. But from geographical standpoint, what's the outlook for China for the rest of the year and specifically Q2?

我只是想問一下第一季中國的收入，看起來很清淡。我只是想知道這是否是影響第二季業績的部分原因。我知道您提到您現在要從第二代硬體過渡到第三代硬件，也許這是另一個因素。但從地理角度來看，中國今年剩餘時間，特別是第二季的前景如何？

Charles, that's a great observation. If you recall this time last year, we were talking about a very strong Q1 for China for functional verification and for upfront revenue. I think those 3 things are often linked. But you contracted with this year, China is down at 12%, upfront revenue is lower at 10% compared to 20% and functional verification, of course, is lapping those really tough comps when we dedicated the 100% production to deliveries.

查爾斯，這是一個很好的觀察。如果您還記得去年的這個時候，我們正在談論中國第一季的功能驗證和預付費用非常強勁。我認為這三件事經常聯繫在一起。但今年你與我們簽訂了合同，中國下降了 12%，前期收入比 20% 低了 10%，當然，當我們將 100% 的生產用於交付時，功能驗證正在超越那些非常艱難的比較。

I think when you look at China, we're blessed that we have the geographical diversification that we have across our business. But the -- what we're seeing in China is strong design activity. And while the percentage of revenue dropped to 12%, it pretty much goes in line with a lower hardware, lower functional verification, lower upfront revenue quarter would generally lead to a lower China percentage quarter. But we have good diversification. And while China is coming down, we could see other Asia increasing and our customer base is really mobile that the geographical mix of revenue is based on consumption and where the products are used. But as we do more upfront revenue in the second half, we'd expect the China percentage to increase.

我認為，當你看看中國時，我們很幸運我們的業務擁有地域多元化。但我們在中國看到的是強勁的設計活動。雖然收入百分比下降至 12%，但這與較低的硬體、較低的功能驗證、較低的前期收入季度通常會導致較低的中國百分比季度一致。但我們有良好的多元化。雖然中國正在下滑，但我們可以看到其他亞洲地區的成長，而且我們的客戶群確實是行動的，收入的地理組合取決於消費和產品的使用地點。但隨著下半年我們預付收入的增加，我們預期中國的比例將會增加。

I want to ask another question about the upcoming ramp of the third-generation hardware. What exactly is the nature of the demand. Is that the replacement demand like your customers replacing your Z2 X2 with the Z3 X3 or expect a lot more great deal of customers adopting Z3 X3? And more importantly, I think you mentioned about 4 to 5x capacity increase that they can design a larger, much larger chips with a lot more transistors. How much of an ASP uplift you are expecting from the Z3 X3 versus Z2 X2?

我想問另一個關於即將推出的第三代硬體的問題。需求的本質到底是什麼？這是一種更換需求，就像您的客戶用 Z3 X3 更換 Z2 X2 一樣，還是期望更多的客戶採用 Z3 X3？更重要的是，我認為您提到了大約 4 到 5 倍的容量增加，他們可以設計更大、更大的晶片和更多的晶體管。您預計 Z3 X3 與 Z2 X2 相比，平均售價會增加多少？

Yes, Charles, all good observation. So let me try to answer that one by one. So I mean in terms of your last point, we -- normally, if the system has more capacity like this one has, it can do more. So it produces -- it gives more value to our customers. So we are able to get more value back. So typically, newer systems are better that way for us and better for the customer, okay?

是的，查爾斯，觀察得很好。那麼讓我試著一一回答這個問題。所以我的意思是，就你的最後一點而言，我們 - 通常，如果系統具有像這個這樣的更大容量，它可以做更多事情。所以它為我們的客戶帶來了更多價值。這樣我們就能夠獲得更多的價值。因此，通常情況下，更新的系統對我們來說更好，對客戶也更好，好嗎？

And to give you an example -- these things are pretty complicated. So let's take Z3, for example. So Z3 itself, we designed this advanced TSMC chip ourselves. And this is one of the biggest ships that TSMC makes. And 1 rack will have like more than 100 of these chips and then we can connect like up to 16 racks together. So if you do that, you have thousands of full radical chips emulating that's -- and these are all liquid cooled, connected by optical and InfiniBand interconnect.

舉個例子──這些事情非常複雜。我們以 Z3 為例。所以Z3本身，我們自己設計了這台先進的台積電晶片。這是台積電製造的最大的船舶之一。 1 個機架將有 100 多個這樣的晶片，然後我們可以將多達 16 個機架連接在一起。因此，如果你這樣做，你就會擁有數千個完整的激進晶片來模擬——而且這些晶片都是液體冷卻的，透過光學和 InfiniBand 互連連接。

So this is like a truly a multi-rack supercomputer. And what it can do is just emulate very, very large systems, very, very efficient. So even Z2 like NVIDIA talked about it last week, even Blackwell, which is the biggest chip in the world right now with 200 billion transistors was emulated on fewer racks of Z2, okay? So now with 16 racks of Z3, we can emulate chips, which are like 5x bigger than Blackwell, which is already the biggest chips in the world, right?

所以這就像一台真正的多機架超級電腦。它能做的就是模擬非常非常大的系統，非常非常有效率。因此，即使像 NVIDIA 這樣的 Z2 上週也談到了這一點，甚至 Blackwell（目前世界上最大的晶片，擁有 2000 億個晶體管）也在 Z2 的更少機架上進行了仿真，好嗎？那麼現在有了 16 個機架的 Z3，我們就可以模擬晶片了，它比 Blackwell 大 5 倍，而 Blackwell 已經是世界上最大的晶片了，對吧？

So that gives a lot of runway for our customers because with AI, the key thing is that the capacity of the chip needs to keep going up, not just a single ship, look at Blackwell, they have 2 full radical ships chips on a package. So as you know, you will see more and more, not just big chips on a single node, but multiple chips in a package for this AI workload and also 3D stacking of those chips.

因此，這為我們的客戶提供了很多跑道，因為對於人工智慧來說，關鍵是晶片的容量需要不斷提高，而不僅僅是一艘船，看看Blackwell，他們在一個封裝上有2 個完整的激進船晶片。如您所知，您將看到越來越多的晶片，不僅僅是單個節點上的大型晶片，還有用於此 AI 工作負載的封裝中的多個晶片以及這些晶片的 3D 堆疊。

So what this allows is not just emulating a single large chip but multiple chips, which is super critical for AI, okay? So I think this is what I feel that this puts us in a very good position for all this AI boom that is happening, not just with our partners like NVIDIA and AMD, but also all the hyperscaler companies, okay?

因此，這不僅可以模擬單一大型晶片，還可以模擬多個晶片，這對於人工智慧來說非常重要，好嗎？所以我認為，這讓我們在所有正在發生的人工智慧熱潮中處於非常有利的位置，不僅是與 NVIDIA 和 AMD 等合作夥伴，還有所有超大規模公司，好嗎？

And so that will be the primary demand as more capacity chips require more hardware, okay? And then X3 will go for that with software prototyping, which is used on FPGA.

因此，這將是主要需求，因為更多容量的晶片需要更多的硬件，好嗎？然後 X3 將採用在 FPGA 上使用的軟體原型設計。

And then we have some unique workload capabilities apart from size of these big systems, the capacity being much better in performance. There are new features for low power for analog emulation that helps in the mobile market. So we talked about Samsung working with us, especially on this 4-state emulation, which is a new capability in emulation over the last 10 years.

除了這些大型系統的規模之外，我們還有一些獨特的工作負載能力，容量的效能也好得多。模擬模擬的低功耗新功能有助於行動市場。因此，我們談到了三星與我們的合作，特別是在 4 狀態模擬方面，這是過去 10 年來模擬領域的新功能。

So I think it just is a combination of new customers, it's a combination of competitive wins, but also continuing to lead in terms of the biggest chip in the world, which are required for AI processing now and years from now. I think the size of these chips, as you know, is only going to get bigger in the next few years. And we feel that Z3 X3 is already set up for that.

因此，我認為這只是新客戶的結合，是競爭勝利的結合，而且在世界上最大的晶片方面繼續保持領先地位，這是現在和未來幾年人工智慧處理所需的。如你所知，我認為這些晶片的尺寸在未來幾年只會變得更大。我們認為 Z3 X3 已經為此做好了準備。

Your next question will come from the line of Lee Simpson with Morgan Stanley.

您的下一個問題將來自摩根士丹利的李辛普森。

Great. And just wanted to go back to what you said last quarter, if I could. It did seem as though you were saying that there was an element of exclusivity around your partnership with ARM -- your EDA partnership around ARM Total Design. I wondered how that was developing, if indeed, you're collaborating to accelerate the development of custom SoCs using Neoverse. It looks as though it's pulled in quite a lot of work or continues to pull in quite a lot of work around functional verification.

偉大的。如果可以的話，我只想回到你上個季度所說的內容。您似乎確實在說，您與 ARM 的合作關係存在著一種排他性元素——您圍繞 ARM Total Design 的 EDA 合作關係。我想知道這是如何發展的，如果確實如此，你們正在合作使用 Neoverse 加速客製化 SoC 的開發。看起來它已經投入了大量的工作，或者繼續投入大量圍繞功能驗證的工作。

And I guess as we look at now third generation tool sets for Palladium and Protium, leaving aside some of the rack scale development that we're seeing out there, whether or not ARM's total design, I guess, development work is pulling in or is likely to pull in some of that second half business. And that means not just hyperscalers, but perhaps in AI PCs and beyond?

我想，當我們現在看看 Palladium 和 Protium 的第三代工具集時，除了我們看到的一些機架規模開發之外，我想，無論 ARM 的總體設計是否正在進行，開發工作是否正在推進可能會帶來一些下半年的業務。這不僅意味著超大規模企業，還可能意味著人工智慧 PC 及其他領域？

Yes. Thank you for the question. I mean we are proud to have a very strong partnership with ARM and with our joint customers, ARM and Cadence customers. I think we have had a very strong partnership over the last 10 years, I would like to say. And it's getting better and better. And yes, we talked about our new partnership on total compute. Also, I think this quarter, we talked about our partnership with [Arm Automotive] because what is interesting to see, which, of course, you know this already, but ARM continues to do well in mobile but also now in kind of HPC server and automotive end markets.

是的。感謝你的提問。我的意思是，我們很自豪能夠與 ARM 以及我們的共同客戶（ARM 和 Cadence 客戶）建立非常牢固的合作關係。我想說，我認為我們在過去 10 年裡建立了非常牢固的夥伴關係。而且它變得越來越好。是的，我們討論了我們在總體計算方面的新合作夥伴關係。另外，我認為本季我們討論了與 [Arm Automotive] 的合作夥伴關係，因為有趣的是，當然，您已經知道這一點，但 ARM 在行動領域繼續表現出色，而且現在在 HPC 伺服器方面也表現出色和汽車終端市場。

So we are pleased with that partnership, and they are also doing more subsystems and higher order development, and that requires more partnership with Cadence in terms of the back end, Innovus and digital flow and also verification with hardware platforms and other verification tools.

所以我們對這種合作關係很滿意，他們也在做更多的子系統和更高階的開發，這需要與Cadence在後端、Innovus和數位流程以及硬體平台和其他驗證工具的驗證方面有更多的合作。

Great. Maybe just a quick follow-up. We've seen quite a bit of M&A activity from yourselves of late, including the IP house acquisition of Invecas. You've had Rambus bought, you've now acquired BETA in the computer-aided emulation space for the car. There's been quite a lot of speculation in the market about the possibility of a transformative deal being done. I guess, given that we have you on the mic here, maybe if we can get a sense from yourself, what would be the sort of thing that a business like Cadence could look for?

偉大的。也許只是快速跟進。最近，我們看到你們進行了大量的併購活動，包括知識產權公司收購 Invecas。您已經購買了 Rambus，現在您已經獲得了汽車電腦輔助模擬領域的 BETA。市場上對達成變革性交易的可能性有許多猜測。我想，既然我們有你在場，也許如果我們能從你自己身上得到一些感覺，像 Cadence 這樣的企業會尋找什麼樣的東西？

Would you look for a high value in a contiguous vertical to what you've already addressed, let's say, in automotive? Or would it be something more waterfront, a business that spans several verticals maybe being more relevant across the industrial software space. Could that be the sort of ambitions that Cadence would have given the silicon-to-systems opportunities that are emerging?

您是否會在與您已經解決的問題（例如汽車產業）相關的垂直領域中尋找高價值？或者它會是更海濱的東西，跨越多個垂直領域的業務可能在工業軟體領域更相關。這是否就是 Cadence 給予正在出現的從晶片到系統的機會的野心？

Well, thank you for the question. And a lot of times, there are a lot of reports, and we normally don't comment on these reports and people get very creative on these reporting. But what I would like to say is that our strategy hasn't changed, okay? It's the same strategy from 2018.

嗯，謝謝你的提問。很多時候，有很多報告，我們通常不會對這些報告發表評論，而人們對這些報告非常有創意。但我想說的是，我們的策略沒有改變，好嗎？這與 2018 年的策略相同。

First of all, I want to make sure you know that we are focused in our core business, which is EDA and IP. And yes, I launched this whole initiative on systems and it's super critical, chips silicon to systems.

首先，我想確保您知道我們專注於我們的核心業務，即 EDA 和 IP。是的，我在系統上發起了整個計劃，它非常關鍵，從晶片到系統。

But what is one thing that I even mentioned last time, what is different from 2018 to now is that EDA and IP is much more valuable to the industry. Our core business itself has become much more valuable because of AI, okay?

但我上次提到的一件事是，與 2018 年到現在不同的是，EDA 和 IP 對產業來說更有價值。我們的核心業務本身因為人工智慧而變得更有價值，好嗎？

So our first focus is in our core business. So we are leading in our core business. Our first focus is on organic development, okay? That's what we like. We always say that's the best way forward.

所以我們的首要重點是我們的核心業務。因此，我們在核心業務方面處於領先地位。我們的首要重點是有機發展，好嗎？這就是我們喜歡的。我們總是說這是最好的前進方式。

Now, along with that, we have done, like you mentioned, some opportunistic M&A, which is usually, I would like to say, is the tuck-in M&A in the past. And that adds to our portfolio. It helped us in system analysis. We also did it in IP because I'm very optimistic about IP growth this year. And we talked about our new partnership with Intel foundry in Q1. Also, we acquired Rambus IP assets, which are HBM and HBM is, of course, a critical technology in AI and we are seeing a lot of growth in HBM this year. Now it's -- we have booked that business, the deliveries will happen towards the second half of the year, as John was saying earlier so that's thing.

現在，除此之外，就像您提到的那樣，我們還進行了一些機會主義併購，我想說，這通常是過去的隱藏式併購。這增加了我們的投資組合。它幫助我們進行系統分析。我們在知識產權方面也做到了這一點，因為我對今年知識產權的成長非常樂觀。我們在第一季討論了與英特爾代工廠的新合作夥伴關係。此外，我們也收購了 Rambus IP 資產，即 HBM，HBM 當然是人工智慧領域的一項關鍵技術，今年我們看到 HBM 的大幅成長。現在，我們已經預訂了該業務，交貨將在今年下半年進行，正如約翰早些時候所說，所以就是這樣。

Now in terms of BETA, it made sense because it is a very good technology. It's the right size for us, and we are focused on finishing that acquisition and also integrating that, that will take some time. So that's our primary focus in terms of M&A.

現在就BETA而言，這是有道理的，因為它是一項非常好的技術。這對我們來說規模合適，我們專注於完成收購並進行整合，這需要一些時間。所以這是我們在併購方面的主要關注點。

And it's a very good technology. They have a very good footprint in automotive and aerospace verticals. So just to clarify, we have the same strategy from '18, and that's doing working as well as primarily organic with very synergistic computational software, mostly tuck-in acquisitions.

這是一項非常好的技術。他們在汽車和航空航天垂直領域擁有非常好的足跡。所以澄清一下，我們從 18 年開始就採取了相同的策略，即透過非常協同的計算軟體進行工作，並且主要是有機的，主要是進行收購。

Your next question comes from the line of Ruben Roy with Stifel.

你的下一個問題來自魯本·羅伊（Ruben Roy）和斯蒂菲爾（Stifel）的線路。

Anirudh, I had a follow-up on the Z3 X3 commentary that you had. And one of the things I was thinking about, especially as you talk about the InfiniBand low latency network across the multiple racks of Z3, you had mentioned that you're up to 85% attach rate of both systems with Z2 X2. I would imagine that would continue to go up. And if you can comment on if the new systems incorporate InfiniBand across Z3 and X3? And if so, do you expect that to be sort of a selling point for your customers that are designing these big chips, which, in many cases, these days have software development attached to the design process. Do you think that the attach rates continue to move higher for both systems?

Anirudh，我跟進了您對 Z3 X3 的評論。我正在考慮的一件事，特別是當您談論跨 Z3 多個機架的 InfiniBand 低延遲網路時，您提到 Z2 X2 的兩個系統的連接率高達 85%。我想這個數字會繼續上升。您能否評論一下新系統是否在 Z3 和 X3 上整合了 InfiniBand？如果是這樣，您是否認為這會成為設計這些大型晶片的客戶的一個賣點，在許多情況下，這些晶片如今在設計過程中附帶了軟體開發。您認為這兩個系統的附加率會繼續走高嗎？

Yes, absolutely. I think I started this in, I forgot now, '16, I think Dynamic Duo or '15 and '16, which is -- we have a custom processor for Palladium, and we use FPGA for Protium, okay? So this is what we call Dynamic Duo because then Palladium is best-in-class for chip verification and RTL design, and Protium is best-in-class for software bring up, okay, and with the common front end. So as a result, over the years, this has become the right approach, okay? And our customers are fully embracing both these systems as they invariably do both chip development and software development.

是的，一點沒錯。我想我是從 16 年開始的，現在我忘了，我認為 Dynamic Duo 或 15 和 16 年，即我們有一個用於 Palladium 的定制處理器，並且我們使用用於 Protium 的 FPGA，好嗎？這就是我們所說的 Dynamic Duo，因為 Palladium 在晶片驗證和 RTL 設計方面是一流的，而 Protium 在軟體啟動方面是一流的，好吧，並且具有公共前端。因此，多年來，這已成為正確的做法，好嗎？我們的客戶完全接受這兩種系統，因為他們總是同時進行晶片開發和軟體開發。

I mean perfect example is, of course, our long-term development partner, NVIDIA. I mean NVIDIA is no longer doing just chip development. They have a massive software stack, and that's true for all the hyperscalers. So we see that trend continuing. And now we do use NVIDIA's products like InfiniBand in our systems on Z3 to your question, which is because Z3 is a very unique architecture. So it requires very, very high-speed interconnect. So it's almost like a supercomputer. So then it requires optical and InfiniBand in Z3. Now in X3, we are using AMD FPGAs, which are fabulous, but it does not require that tight interconnect speed.

我的意思是，完美的例子當然是我們的長期開發合作夥伴 NVIDIA。我的意思是 NVIDIA 不再只是從事晶片開發。他們擁有龐大的軟體堆疊，對於所有超大規模企業來說都是如此。所以我們看到這種趨勢仍在繼續。對於您的問題，現在我們在 Z3 上的系統中確實使用了 NVIDIA 的產品，例如 InfiniBand，這是因為 Z3 是一個非常獨特的架構。因此它需要非常非常高速的互連。所以它幾乎就像一台超級電腦。那麼 Z3 中就需要光纖和 InfiniBand。現在在 X3 中，我們使用 AMD FPGA，這非常棒，但它不需要那麼嚴格的互連速度。

So InfiniBand is more used in Z3 versus X3. But X3 is a great system, too. We're using the latest AMD FPGAs. It has 8x higher capacity than X2 and all kinds of innovation on the software side as well. So we are very pleased. I'm very confident that we have true leadership in these hardware platforms, both palladium and Protium. And we're also pleased, like I said earlier, that we are able to refresh it much sooner than the market expected, given our track record, and then we are seeing a lot of demand for both of these systems together going forward.

所以InfiniBand比較用在Z3而不是X3。但 X3 也是一個很棒的系統。我們使用最新的 AMD FPGA。它的容量是X2的8倍，在軟體方面也有各種創新。所以我們非常高興。我非常有信心，我們在這些硬體平台（包括 Palladium 和 Protium）方面擁有真正的領導地位。正如我之前所說，我們也很高興，鑑於我們的業績記錄，我們能夠比市場預期更快地更新它，然後我們看到未來對這兩個系統的大量需求。

That's helpful. And then a follow-up for John. Anirudh mentioned HBM IP business booked and shipping in second half. I was wondering if you can kind of give us a bigger picture update on how you're viewing IP in general in terms of bookings relative to sort of ramps of those IP sales? Is it sort of the entire segment sort of a second half, should we think about the second half ramping at a heavier weight than first half? Or any update there would be helpful.

這很有幫助。然後是約翰的後續行動。 Anirudh提到HBM IP業務下半年已預訂並出貨。我想知道您是否可以向我們提供更全面的最新情況，說明您如何看待 IP 的整體情況，即預訂相對於 IP 銷售成長的情況？這是下半場的整個部分嗎？或任何更新都會有幫助。

Yes. Thanks, Ruben. I mean Q1 IP performance and bookings were ahead of our expectations and everything remains on track there for a very strong growth year for 2024 for the IP business. Of course, the timing of revenue recognition depends on the timing of deliveries. But we had a tremendous bookings quarter in Q1, and we're preparing to scale for a number of deliveries of IP in the second half. But we expect the IP to have a very strong year this year. We're pleased with the overall business momentum, but we need to scale up some head count to prepare to deliver on some of the larger backlog orders.

是的。謝謝，魯本。我的意思是，第一季的 IP 業績和預訂量超出了我們的預期，一切都保持在正軌上，2024 年 IP 業務將迎來非常強勁的成長。當然，收入確認的時間取決於交貨時間。但我們在第一季的預訂量很大，我們正準備在下半年擴大 IP 的交付數量。但我們預計該 IP 今年將表現強勁。我們對整體業務動能感到滿意，但我們需要增加一些人員數量，以準備交付一些較大的積壓訂單。

Yes. One thing I want to highlight. I think you may have seen this. I just want to highlight our partnership with Intel and IFS, okay? That was concluded in Q1. And so it's really good to see [PAT] and Intel investing more in the foundry business and also working more closely with us. So that's also a key contributor to IP. But like John said, we have to hire the people, do the -- we need to put our portfolio to the Intel process, okay? And that takes some time. So that's more will come towards the end of the year and next year. But we are pleased with that new partnership on IP, okay?

是的。我想強調一件事。我想你可能已經看到這個了。我只是想強調一下我們與英特爾和 IFS 的合作關係，好嗎？這是在第一季得出的結論。因此，很高興看到 [PAT] 和英特爾在代工業務上加大投資，並與我們更密切合作。所以這也是智慧財產權的一個關鍵貢獻者。但就像約翰說的，我們必須僱用人員，我們需要將我們的產品組合納入英特爾流程，好嗎？這需要一些時間。因此，到今年年底和明年將會有更多的情況出現。但我們對知識產權方面的新合作關係感到滿意，好嗎？

Your next question comes from the line of Jay Vleeschhouwer with Griffin Securities.

您的下一個問題來自 Griffin Securities 的 Jay Vleeschhouwer。

For you John, first and then Anirudh. So for John, thinking back to a recent conversation we had, could you comment as a measure of EDA market health or dynamics, what you're seeing or expecting in terms of intra contract new or expansion business? This is an ongoing phenomenon in EDA. Maybe talk about what you're seeing in that kind of business beyond the customary renewals schedule? And then relatedly, how are you thinking about pricing for this year, given that EDA generally has substantially better pricing capacity than you might have had in years past? And then my follow-up for Anirudh.

對你來說，約翰，首先是阿尼魯德。那麼，約翰，回想一下我們最近的一次談話，作為衡量 EDA 市場健康狀況或動態的指標，您能否評論一下您在合約內新業務或擴展業務方面所看到或期望的情況？這是 EDA 中持續存在的現象。也許可以談談您在此類業務中所看到的超出常規續訂時間表的情況？與此相關的是，鑑於 EDA 的定價能力總體上比過去幾年要好得多，您如何考慮今年的定價？然後是我對 Anirudh 的後續行動。

Sure. Thanks, Jay. Great question. Yes, I think what you're getting at there is what we would call add-ons. Typically, we have the very predictable software renewal business. And you'll see in the recurring revenue part of our business, I think we're at double-digit revenue growth. But over the past few years, I think that's been at low teens. But we're seeing that a number of customers that have adopted AI tools are maybe not coming back and purchasing add-ons as frequently.

當然。謝謝，傑伊。很好的問題。是的，我認為您所得到的就是我們所說的附加元件。通常，我們的軟體更新業務非常可預測。你會看到我們業務的經常性收入部分，我認為我們的營收成長達到兩位數。但在過去的幾年裡，我認為這個數字一直在十幾歲左右。但我們發現，許多採用人工智慧工具的客戶可能不會再頻繁地回來購買附加元件。

But right now, we're focused on proliferating those AI tools into account. I think there's an opportunity to increase pricing there, but maybe now is not the right time. I think we have such strong momentum on the upfront revenue business. We're preparing for scale into the second half there, but we'll have plenty of revenue growth in the second half of the year. We can continue to focus on proliferating our AI tools and technology into accounts. And pricing is something certainly we can focus on more intently in future years. But right now, the focus is on proliferation. Anirudh, do you have anything to add to that? No?

但現在，我們的重點是推廣這些人工智慧工具。我認為那裡有機會提高價格，但也許現在還不是合適的時機。我認為我們在前期收入業務方面擁有如此強勁的勢頭。我們正在為下半年的規模擴張做準備，但下半年我們的收入將會大幅成長。我們可以繼續專注於將我們的人工智慧工具和技術擴展到帳戶中。定價肯定是我們未來幾年可以更加關注的事情。但現在的焦點是擴散。 Anirudh，您還有什麼要補充的嗎？不？

Okay. So Anirudh, thinking back to your conference last week, particularly the GenAI track. It was interesting, of course, to hear the adoption presentations by Renesas, Intel and so forth. But what seemed to be taking place is a heavy focus on Cerebrus, which makes sense. It's the one longest end market. So perhaps, you could talk about how you're thinking about the adoption curve for the other brands aside from Cerebrus? And are there any critical parts of the design flow that might not necessarily be amenable to AI enablement. We hear a lot about implementation, analog, verification, but we don't hear a lot about AI as being applicable to synthesis, for example. So maybe talk about those areas where it makes a lot of sense and knows where perhaps it will remain more or less conventional technology?

好的。 Anirudh，回想一下上週的會議，特別是 GenAI 主題。當然，聽到瑞薩、英特爾等公司的採用示範很有趣。但似乎正在發生的事情是對 Cerebrus 的高度關注，這是有道理的。這是最長的終端市場之一。那麼也許您可以談談您如何看待除 Cerebrus 之外的其他品牌的採用曲線？設計流程中是否存在不一定適合人工智慧支援的關鍵部分？例如，我們聽到很多關於實現、模擬、驗證的內容，但我們沒有聽到很多關於人工智慧適用於綜合的內容。那麼，也許可以談談那些很有意義的領域，並且知道哪些領域可能會或多或少保留傳統技術？

Yes. Thanks, Jay, for the question. So as you know, we have 5 major AI platforms with Cerebrus and digital implementation being the one that has been out the longest and Cerebrus is doing quite well, like you noted, and we also commented on more than 350 tapeouts, a lot of PPA improvement. But all the other ones are doing well, too. Sometimes we have like too many products, we don't talk enough about the others, but like verification, like Verisium is doing quite well. And I mentioned Qualcomm last week talked about pretty impressive results because verification, as you know, is an exponential problem because as the chips get bigger, the verification task gets exponentially bigger.

是的。謝謝傑伊的提問。如您所知，我們有5 個主要的AI 平台，其中Cerebrus 和數位實施是推出時間最長的平台，Cerebrus 做得相當好，正如您所指出的，我們還對超過350 個流片、大量PPA進行了評論改進。但所有其他人也都表現良好。有時我們有太多的產品，我們對其他產品的討論不夠，但像驗證一樣，Verisium 做得很好。我提到高通上週談到了相當令人印象深刻的結果，因為正如你所知，驗證是一個指數級問題，因為隨著晶片變得越來越大，驗證任務也會呈指數級增長。

So the benefit of AI can be significant in verification. So I think you will see that in the next few quarters and years that verification will be as important as implementation in terms of benefits of AI, okay?

因此，人工智慧在驗證方面的優勢非常顯著。所以我認為你會發現，在接下來的幾個季度和幾年裡，就人工智慧的好處而言，驗證將與實施一樣重要，好嗎？

And then the other area I would like to highlight is PCB and Allegro and packaging because that area hasn't seen that much automation in PCB. And Allegro is a leading platform for packaging and PCB, but really proud of Allegro X AI. And we talked about several customers, including Intel last week talked about 4 to 10x improvement using X AI and PCB. So apart from digital, I think the next 2 ones, I feel, are verification and Allegro and PCB.

我想強調的另一個領域是 PCB 和 Allegro 以及封裝，因為該領域在 PCB 中還沒有看到太多的自動化。 Allegro 是領先的封裝和 PCB 平台，但真正為 Allegro X AI 感到自豪。我們談到了幾家客戶，包括英特爾上週談到使用 X AI 和 PCB 實現了 4 到 10 倍的改進。因此，除了數字之外，我認為接下來的兩個是驗證、Allegro 和 PCB。

And then the areas that haven't done as well, I mean, is more not in design optimization is like design generation. And I think there, this LLM-based models do provide a lot of promise. So historically, we haven't done as much design generation, this is like almost pre-RTL, right, going from spec to RTL. That's truly the creative part of the design process. And then once you have RTL, it's more optimization part in digital and verification.

我的意思是，還沒有做得很好的領域更多地不是設計優化，例如設計生成。我認為，這種基於法學碩士的模型確實提供了許多希望。所以從歷史上看，我們沒有做過那麼多的設計生成，這幾乎就像 RTL 之前一樣，對吧，從規範到 RTL。這確實是設計過程中的創意部分。一旦你有了RTL，它就是數字和驗證方面更多的最佳化部分。

So I think that's where we have to see, but some initial results, which we haven't talked -- I think mentioned last week. But we work with a -- but we have to see it still in early stages, but we work with 1 or 2 customers in which we took like a 40, 50-page spec document, this English document and able to automatically generate RTL from it, okay? And the RTL quality is pretty good.

所以我認為這是我們必須看到的，但我們還沒有討論過一些初步結果——我想上週已經提到過。但我們與一個 - 但我們必須看到它仍處於早期階段，但我們與 1 或 2 個客戶合作，我們在其中獲取了一份 40、50 頁的規範文檔，這個英文文檔，並且能夠自動生成 RTL它，好嗎？而且RTL品質相當不錯。

So again, we have to see how that goes, but that requires these really advanced LLM capabilities. So that's something to be seen. But if that works well, that could be another kind of very interesting kind of application of GenAI.

再說一次，我們必須看看事情進展如何，但這需要這些真正先進的法學碩士能力。所以這是有待觀察的事情。但如果效果良好，那可能是 GenAI 的另一個非常有趣的應用。

Your next question comes from the line of 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 (Gary Mobley)。

John, I appreciate the fact that China revenue in the first quarter was down against a tough year-ago comp on the hardware verification side as you worked on backlog. And I assume that you still expect China to be dilutive to overall company growth in the fiscal year. Could you speak to whether or not you're starting to see U.S. export controls begin to impact your ability to do business there, whether that be a function of restrictions around gate all around or certain China customers added to the entity list?

約翰，我很欣賞這樣一個事實，即在您處理積壓工作時，第一季中國的收入在硬體驗證方面與去年同期相比有所下降。我認為您仍然預計中國會稀釋本財年公司的整體成長。您能否談談您是否開始看到美國的出口管制開始影響您在那裡開展業務的能力，無論這是由於各地的限制還是某些中國客戶被添加到實體名單中？

Gary, thanks for the question. And just to clarify, I think last quarter, I said I expected China revenue to be flat to down this year. I think we still expect that. And that's because last year was such a strong year, and there was a lot of -- there was kind of an oversized portion of that hardware catch-up that we had that was delivered to China. So I think it skewed the China number higher last year. So we're lapping pretty tough comps. But design activity in China remains very strong, though. We have a lot of diversification. There's strength in other parts of the world. But we're very comfortable with the 2024 outlook and we factored all the impact of geopolitical risk in there to the best we can and try to derisk China as much as we can in our guide.

加里，謝謝你的提問。澄清一下，我想上個季度，我說我預計今年中國的營收將持平甚至下降。我想我們仍然期待這一點。這是因為去年是非常強勁的一年，我們的硬體追趕中有很大一部分交付給了中國。所以我認為去年中國的數字偏高了。所以我們正在進行非常艱難的比賽。但中國的設計活動仍然非常強勁。我們有很多多元化。世界其他地區也有實力。但我們對 2024 年的前景非常滿意，我們盡可能地考慮了地緣政治風險的所有影響，並在我們的指南中盡可能降低中國的風險。

Okay. The follow-up, I want to ask about bookings trends for the balance of the year. You obviously highlighted better than seasonal Q1 booking trends. How would you expect the bookings to play out for the balance of the year? And to what extent will Z3 and X3 factor into that for the balance of the year?

好的。接下來，我想詢問今年剩餘時間的預訂趨勢。您顯然強調了比第一季季節性預訂趨勢更好的趨勢。您預計今年剩餘時間的預訂情況如何？在今年剩下的時間裡，Z3 和 X3 會在多大程度上影響這個因素？

Yes. I mean it's hard to predict in terms of Z3 and X3 but we definitely need another quarter to see that. I expect we expect strong demand and we expect strong revenue growth into the -- that we're preparing for scale into the second half on the hardware side, but we need to at least see another quarter of demand. And normally, with hardware, I don't like taking up the year for hardware until I see the pipeline in the summer. But -- so we're trying to be conservative there. But generally, on the hardware side, yes, we're basically preparing for scale. We'll trying to build -- we'll build those systems as quickly as possible. We expect strong demand there.

是的。我的意思是，很難預測 Z3 和 X3，但我們肯定還需要另一個季度才能看到這一點。我預計我們預計需求強勁，我們預計收入將強勁增長——我們正在為下半年硬體方面的規模擴張做準備，但我們至少需要看到另一個季度的需求。通常，對於硬件，我不喜歡花一年的時間來研究硬件，直到夏天看到管道。但是——所以我們試著在這方面保持保守。但總的來說，在硬體方面，是的，我們基本上正在為規模化做準備。我們將努力建構——我們將盡快建立這些系統。我們預計那裡的需求強勁。

Your next question comes from the line of Jason Celino with KeyBanc Capital Markets.

您的下一個問題來自 KeyBanc Capital Markets 的 Jason Celino。

And Anirudh, congrats to your R&D team. Impressed that they reduced the cycle there, all while designing (inaudible), too, right? Maybe first, just how many of the -- for the Z3 and X3, does it become available in Q3? I guess when can customers start putting orders in for that?

Anirudh，恭喜您的研發團隊。令人印象深刻的是，他們在設計時也縮短了周期（聽不清楚），對嗎？也許首先，Z3 和 X3 中有多少會在第三季上市？我想客戶什麼時候可以開始下訂單？

Yes. First of all, thanks. And yes, they become available in now, okay? And it will ramp Q3 and then Q4. But we already have them running at several early customers. So I mean normally when we announce something, as you know, like -- and one of our lead partners, they have been running for 3 months already and very stable. But in general, it will be more Q3 and then Q4 in terms of -- because normally, in any system, there is like a 3- to 6-month kind of overlap. So we will still sell Z2 X2 and then move to Z3 X3. So that's a natural part. And that's also contributing to this quarter-by-quarter variation a little bit, but it will ramp. And Q3 will be bigger and then Q4 should be bigger than that.

是的。首先，謝謝。是的，它們現在就可以使用，好嗎？它將使 Q3 上升，然後 Q4。但我們已經在幾個早期客戶中運行了它們。所以我的意思是，通常當我們宣布某件事時，如您所知，例如我們的主要合作夥伴之一，他們已經運行了 3 個月並且非常穩定。但總的來說，第三季和第四季會更多——因為通常情況下，在任何系統中，都會有 3 到 6 個月的重疊。所以我們還是會賣掉Z2 X2，然後轉向Z3 X3。所以這是很自然的一部分。這也對逐季度的變化產生了一點影響，但它會逐漸增加。 Q3 會更大，然後 Q4 應該會更大。

Yes, we try to derisk the guide with the assumption that there's going to be strong demand for the newer systems. But it will give us the opportunity to put some of the older systems into the cloud because we have a large underserved community that want to use our emulation capacity, but we haven't had a lot of capacity to share with them through our cloud offering. To the extent we do that, that will lead to ratable revenue, though, because I think when it's used in the cloud, you get revenue over time, whereas when we deliver and they use it on-prem, we take revenue upfront. Yes, that's it.

是的，我們試圖透過假設對新系統的強勁需求來消除該指南的風險。但這將使我們有機會將一些舊系統放入雲端中，因為我們有一個服務不足的大型社區想要使用我們的模擬能力，但我們沒有太多能力透過我們的雲端產品與他們分享。不過，就我們這樣做而言，這將帶來可估價的收入，因為我認為當它在雲端中使用時，您會隨著時間的推移獲得收入，而當我們交付並且他們在本地使用它時，我們會預先獲得收入。對，就是那樣。

But the demand it takes like 1 to 2 quarters to ramp.

但需求需要 1 到 2 個季度才能增加。

Okay. Because that's kind of what I was going to ask next is I think last time in 2021, you had like a 6-month period where you're selling both. And I think you were trying to clear inventory for the Z1 and X1. It doesn't sound like you'll be trying to do that again. Because when I think about this Q2 air pocket, is it a function of customers waiting for Z3 X3? Or is it a function of they might not want to buy the older version?

好的。因為這就是我接下來要問的問題，我認為上次是在 2021 年，你們有大約 6 個月的時間出售這兩種產品。我認為你們正試圖清理 Z1 和 X1 的庫存。聽起來你不會再嘗試這樣做了。因為我想想這個Q2氣袋，是不是等待Z3 X3的顧客的功能呢？或者這是因為他們可能不想購買舊版本？

Well, the guide -- we've derisk guide on the assumption that many customers might wait. But we intend to sell them side by side. But to the extent the customers wait, it will shift some hardware revenue into the second half of the year. And we've anticipated that. So that's within the guide. To the extent the customers continue to buy Z2, and we're not putting those into the cloud, but selling those outright as well. Well, then that will change the profile or the shape of revenue. But we expect that this new system, the strength of this new system will trigger a lot of demand for it.

好吧，指南——我們假設許多客戶可能會等待，因此消除了指南的風險。但我們打算並排出售它們。但在客戶等待的範圍內，它將把部分硬體收入轉移到今年下半年。我們已經預料到了這一點。這就是指南中的內容。如果客戶繼續購買 Z2，我們不會將它們放入雲端中，而是直接出售它們。好吧，那麼這將改變收入的概況或形式。但我們預期這個新系統，這個新系統的力量將會引發對它的大量需求。

Your next question comes from the line of 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 think you mentioned second half growth will be driven a lot more by hardware. Do you think you will see all the benefit of the hardware refresh within this year? Will it be done? Will it continue into '25. I guess my bigger question really is that if I exclude the upfront benefit from last year and this year, your recurring business is expected to grow about 10%.

我想你提到下半年的成長將更多地由硬體驅動。您認為今年內您會看到硬體更新的所有好處嗎？會做嗎？會持續到25年嗎？我想我更大的問題實際上是，如果排除去年和今年的前期收益，您的經常性業務預計將增長 10% 左右。

And I'm curious, Anirudh, is that in line with the kind of recurring revenue growth you are expecting or we should be expecting going forward, right, along with periodic hardware refreshes? Or is that not the right way to interpret your core recurring part of your business?

我很好奇，Anirudh，這是否符合您所期望的經常性收入增長，或者我們應該期望未來的發展，對吧，以及定期的硬體更新？或者這不是解釋您業務的核心經常性部分的正確方法？

Very good question. First of all, in nonrecurring, it's not just hardware, but it's also IP in terms of the second half because like we mentioned, we have new IP business driven by HBM and AI and also by Intel IFS. So that is also back-end loaded along with hardware. And then hardware, hardware normally, when we launch a new system, it takes 1 or 2 years for it to fully -- so even though we are not commenting about next year, I'd be surprised if this time, it's only a 6-month impact.

非常好的問題。首先，就非經常性而言，下半年的情況不僅僅是硬件，還包括 IP，因為正如我們所提到的，我們擁有由 HBM 和 AI 以及英特爾 IFS 驅動的新 IP 業務。所以這也是與硬體一起後端加載的。然後是硬件，通常硬件，當我們推出一個新系統時，需要 1 或 2 年才能完全實現——所以即使我們不評論明年，如果這次只是 6，我會感到驚訝- 月的影響。

So I expect like these things is built for to be used in design for next 5, 7 years. So the impact will be also not just this year but following years. And in terms of recurring revenue, I think the best way like we have said is to look at a 3-year CAGR basis because there could be some fluctuation in all. And overall, we are pleased with the recurring revenue growth and we go from there. Yes.

所以我希望這些東西能夠在未來 5、7 年的設計中使用。因此，影響不僅會發生在今年，還會發生在接下來的幾年。就經常性收入而言，我認為像我們所說的最佳方法是查看 3 年複合年增長率，因為總體上可能會出現一些波動。總的來說，我們對經常性收入的成長感到滿意，我們將繼續前進。是的。

Yes. And Vivek, if I could, I'd like to kind of take -- carry in some of Gary's question earlier that I don't think I addressed because he was asking about the bookings profile for the year. Q2 for software renewals, I think, is our lightest software renewals quarter for the year. But I think we explained last quarter that we expect the weighting of bookings first half to second half to be about 40-60 this year. But the recurring revenue right now in the guide is about double digits, about 10%. And in the past, it's been about 13%. Now we're not really anticipating a huge number of add-ons, but to grow that above 10%. To the extent that, that comes through, it will be upside to the guide. But what we try to do when we do the guide is derisk for the risks that we can see.

是的。維韋克，如果可以的話，我想接受加里早些時候提出的一些問題，我認為我沒有解決這個問題，因為他問的是今年的預訂情況。我認為，第二季的軟體更新是我們今年軟體更新最少的季度。但我認為我們在上個季度解釋過，我們預計今年上半年到下半年的預訂權重約為 40-60。但目前指引中的經常性收入約為兩位數，約 10%。而在過去，這一比例約為 13%。現在我們並不是真正期望有大量的附加元件，而是希望將其成長到 10% 以上。如果這一點得以實現，這對指南來說將是有利的。但是，當我們編寫指南時，我們試圖做的是消除我們可以看到的風險。

Okay. For my follow-up question on incremental EBIT margin. Do you think this greater mix of hardware is impacting the incremental EBIT margin. I think if I calculate it correctly, the new guidance is still below the 50% incremental, right, or right about, which is lower than what you have had the last 2, 3 years. Is that the right interpretation? And what can change that?

好的。關於我關於增量息稅前利潤率的後續問題。您認為這種更大的硬體組合是否會影響增量息稅前利潤率？我認為，如果我計算正確的話，新的指導方針仍然低於 50% 的增量，對，或者說是對的，這比過去 2、3 年的水平要低。這是正確的解釋嗎？什麼可以改變這一點？

Yes, Vivek, I think what you're referring to really is that, I mean, for what, 7 years in a row now, we think we've been achieving over 50% incremental margins. It's a matter of pride here, We try to achieve that every year, but we'll certainly be trying to achieve that this year. I think we're in the high 40s. It's probably about 47% when you look at this guide right now. I think one of the biggest challenges with something like that is you know, we do small tuck-in M&A, but I don't want to go over Lee Simpson -- the answer Anirudh gave to Lee Simpson but organic is delicious here. At Cadence, we focus on innovation and growing with organically driven products and then with small tuck-in M&A. But to the extent that we do some larger M&A and of course, we have BETA CAE, which apparently is the gold standard in structural simulation. So that's a big acquisition for us.

是的，Vivek，我想你真正指的是，我的意思是，我們認為我們已經連續 7 年實現了超過 50% 的增量利潤。這是一個值得自豪的問題，我們每年都努力實現這一目標，但今年我們肯定會努力實現這一目標。我認為我們已經40多歲了。當您現在查看本指南時，該比例可能約為 47%。我認為類似的事情最大的挑戰之一是你知道，我們進行小型的併購，但我不想回顧李辛普森——阿尼魯德給李辛普森的答案，但這裡的有機食品很美味。在 Cadence，我們專注於創新和透過有機驅動的產品實現成長，然後透過小型併購實現成長。但就我們進行一些規模較大的併購而言，當然，我們有 BETA CAE，這顯然是結構模擬的黃金標準。所以這對我們來說是一筆重大收購。

But now I think the size of that probably still qualifies as a small tuck-in. But when you do something like that, that those M&A transactions typically are headwinds to that incremental margin calculation in the short term, they will be beneficial in the long term. But in the short term, M&A can be dilutive pretty much in the first year and then becomes accretive later.

但現在我認為它的大小可能仍然符合小型折疊的要求。但是，當你這樣做時，這些併購交易通常會在短期內阻礙增量利潤計算，但從長遠來看，它們將是有利的。但從短期來看，併購在第一年可能會造成相當大的稀釋，然後又會變得增值。

When we look at our incremental margin. That's a headwind. But we try to overcome that headwind because normally, all we do with these small tuck-in M&As. So I haven't given up on 50% incremental margin for this year. It's a challenge, but we'll do our best to achieve this.

當我們查看增量利潤時。這是一個逆風。但我們會努力克服這種阻力，因為通常情況下，我們所做的就是這些小型的併購。所以我今年並沒有放棄50%的增量利潤。這是一個挑戰，但我們會盡力實現這一目標。

Your final question will come from the line of Harlan Sur with JPMorgan.

你的最後一個問題將來自哈蘭·蘇爾與摩根大通的連結。

After a strong 2023, SDA is starting the year relatively flattish and down about 5% to 6% sequentially. I think it feels like it's an unusual starting point for SDA, especially given all of the drivers that you guys have articulated. Is SDA expected to also be more second half loaded? And do you expect SDA, this is ex BETA CAE, but do you expect SDA to grow in line or faster than your overall corporate growth target for the full year?

在經歷了 2023 年的強勁表現之後，SDA 今年開局相對平穩，比上一季下降了約 5% 至 6%。我認為這對 SDA 來說是一個不尋常的起點，特別是考慮到你們所闡述的所有驅動因素。 SDA 下半年的負載是否預計也會更高？您是否期望 SDA（這是前 BETA CAE）的成長，但您是否期望 SDA 的成長符合或快於公司全年的整體成長目標？

Yes, Harlan. That's a great question. And thanks for highlighting that because I had that on my list of things to say, I think there's something funny going on with the rounding on when you kind of apply the growth rates for SDA for Q1-over-Q1, the actual growth rate is probably high single digits Q1-over-Q1. I know that's lapping tough comps against Q1 '23. I think if you look on a 2-year CAGR basis, I think it's up about 17% per annum on a 2-year CAGR basis for SG&A. But we're expecting strong SG&A growth again this year, and it will be higher than the Cadence average. That's our expectation.

是的，哈倫。這是一個很好的問題。感謝您強調，因為我要說的事情清單上有這一點，所以我認為當您將SDA 的增長率應用於第一季與第一季相比時，四捨五入會發生一些有趣的事情，實際增長率是Q1 可能比 Q1 高個位數。我知道這與 ​​23 年第一季的比賽非常艱難。我認為，如果你以 2 年複合年增長率為基礎，我認為 SG&A 的 2 年複合年增長率每年增長約 17%。但我們預計今年SG&A 將再次強勁成長，並將高於Cadence 平均。這是我們的期望。

Great. And then, Anirudh lots of new accelerated compute AI SoC announcements just even over the past few weeks where we saw flagship Blackwell GPU announcement by one of your big customers, NVIDIA. But we've actually seen even more announcements by your cloud and hyperscale customers bringing their own custom AI ASICs to the market with Google with TPU v5, Google with their Arm-based CPU ASIC, Meta unveiled their Gen 2 TPU AI classes of chips as well. And in addition to that, like their road maps seem to be accelerating. So can you give us an update on your systems and hyperscale customers? I mean are you seeing the design activity accelerating within this customer base? And is the contribution mix from these customers rising above that sort of roughly 45% level going forward?

偉大的。然後，Anirudh 就在過去幾週內發布了許多新的加速運算 AI SoC，我們看到您的大客戶之一 NVIDIA 發布了旗艦 Blackwell GPU。但實際上，我們已經看到更多的雲端和超大規模客戶宣布將他們自己的客製化AI ASIC 推向市場，Google 推出了TPU v5，Google 推出了基於Arm 的CPU ASIC，Meta 推出了他們的第二代TPU AI 類晶片：出色地。除此之外，他們的路線圖似乎正在加速。那麼您能為我們介紹一下您的系統和超大規模客戶的最新情況嗎？我的意思是，您是否看到該客戶群中的設計活動正在加速？這些客戶的貢獻比例未來是否會上升到大約 45% 的水平之上？

Yes, Harlan, that's a very good observation. And the pace of AI innovation like is increasing and not just in the big semi companies, but of course, in these system companies. And I think several announcements did come out, right, including, I think now Meta is public that Meta is designing a lot of silicon for AI. And of course, Google, Microsoft, Amazon. So all the big, really hyperscaler companies, along with NVIDIA, AMD, Qualcomm, all the other kind of Samsung had AI phone this year.

是的，哈倫，這是一個非常好的觀察。人工智慧創新的步伐正在加快，不僅是在大型半導體公司，當然也包括這些系統公司。我認為確實發布了一些公告，對吧，包括，我認為現在 Meta 已經公開，Meta 正在為人工智慧設計大量晶片。當然，還有Google、微軟、亞馬遜。因此，所有大型超大規模公司，包括 NVIDIA、AMD、高通，以及所有其他類型的三星，今年都推出了 AI 手機。

So I mean, there is a lot of acceleration both on the semi side and on the system side. And we are involved with all the major players there, and we're glad to provide our solutions.

所以我的意思是，半側和系統側都有很大的加速。我們與那裡的所有主要參與者都有合作，我們很高興提供我們的解決方案。

And I do think -- and this is the other thesis we have talked about for years now, right, 5, 7 years that the system companies will do silicon because of a lot of reasons for customization, for schedule and supply chain control for cost benefits, if there is enough scale. And I think the workload of AI, like if you look at I think some of the big hyperscaler and social media companies, they're talking about using like 20,000, 24,000 GPUs to train these new models. I mean this is immense amount.

我確實認為——這是我們多年來討論的另一個論點，對吧，5、7年後，系統公司將做芯片，因為定制、進度和供應鏈控制、成本等諸多原因如果有足夠的規模，就會有好處。我認為人工智慧的工作負載，就像我認為一些大型超大規模和社群媒體公司一樣，他們正在談論使用 20,000、24,000 個 GPU 來訓練這些新模型。我的意思是這是一個巨大的數額。

And then the size of the model and the number of models increased, so that could go to a much, much higher number than right now that is required to train these models and of course, to do inference on these models. So I think we are still in the early innings in terms of system companies developing their own chips and at the same time, working with the semi companies. So I expect that to grow and those -- and our business with the system companies doing silicon, I would like to say is growing faster than Cadence average. But the good thing is the semi guys are also doing a lot of business. So I don't know if that 45% will -- because that's a combination of a lot of companies. But overall, the AI and hyperscalers, they are doing a lot more than so are the big semi company.

然後模型的大小和模型的數量增加，因此訓練這些模型以及對這些模型進行推理所需的數量可能會比現在高得多。因此，我認為，就係統公司開發自己的晶片並同時與半導體公司合作而言，我們仍處於早期階段。因此，我預計這一成長速度將超過 Cadence 平均值。但好消息是半人也做了很多生意。所以我不知道這 45% 是否會——因為這是很多公司的組合。但總體而言，人工智慧和超大規模企業所做的事情比大型半導體公司多得多。

I'll now turn it back over to Anirudh Devgan for closing remarks.

現在我將把它轉回 Anirudh Devgan 作結束語。

Thank you all for joining us this afternoon. It's an exciting time for Cadence as our broad portfolio and product leadership highly positions us to maximize the growing opportunities in the semiconductor and systems industry. 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.

感謝大家今天下午加入我們。對於 Cadence 來說，這是一個令人興奮的時刻，因為我們廣泛的產品組合和產品領先地位使我們能夠最大限度地利用半導體和系統行業的成長機會。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 First Quarter 2024 Earnings Conference Call. This concludes today's call, and you may now disconnect.

感謝您參加今天的 Cadence 2024 年第一季財報電話會議。今天的通話到此結束，您現在可以掛斷電話了。