SOURCE: CADENCE DESIGN SYSTEMS, INC.

October 24, 2007 16:05 ET

Cadence Reports Q3 Revenue Up 9% Over Q3 2006

SAN JOSE, CA--(Marketwire - October 24, 2007) - Cadence Design Systems, Inc. (NASDAQ: CDNS) today reported third quarter 2007 revenue of $401 million, an increase of 9 percent over the $366 million reported for the same period in 2006. On a GAAP basis, Cadence recognized net income of $73 million, or $0.24 per share on a diluted basis, in the third quarter of 2007, compared to $42 million, or $0.14 per share on a diluted basis, in the same period in 2006.

In addition to using GAAP results in evaluating Cadence's business, management believes it is useful to measure results using a non-GAAP measure of net income, which excludes, as applicable, amortization of intangible assets, stock-based compensation expense, in-process research and development charges, integration and acquisition-related costs, gains and expenses related to non-qualified deferred compensation plan assets, executive severance payments, restructuring charges and credits, losses on extinguishment of debt and equity in losses (income) from investments. Non-GAAP net income is adjusted by the amount of additional taxes or tax benefit that the company would accrue if it used non-GAAP results instead of GAAP results to calculate the company's tax liability. See "GAAP to non-GAAP Reconciliation" below for further information on the non-GAAP measure.

Using this non-GAAP measure, net income in the third quarter of 2007 was $97 million, or $0.33 per share on a diluted basis, as compared to $81 million, or $0.26 per share on a diluted basis, in the same period in 2006.

"Our cross platform solutions, such as low power and logic design team, are gaining traction. At the same time, we're seeing momentum in the uptake of our Virtuoso platform upgrade," said Mike Fister, president and CEO of Cadence.

"It was another good quarter for achieving our primary operating metrics -- revenue, operating profitability and cash flow," added Bill Porter, executive vice president and chief financial officer.

The following statements are based on current expectations. These statements are forward-looking, and actual results may differ materially. These statements do not include the impact of any mergers, acquisitions or other business combinations completed after Sept. 29, 2007.

Business Outlook

For the fourth quarter of 2007, the company expects total revenue in the range of $465 million to $475 million. Fourth quarter GAAP earnings per diluted share are expected to be in the range of $0.34 to $0.36. Diluted earnings per share using the non-GAAP measure defined below are expected to be in the range of $0.45 to $0.47.

For the full year 2007, the company expects total revenue in the range of $1.622 billion to $1.632 billion. On a GAAP basis, net income per diluted share for fiscal 2007 is expected to be in the range of $0.94 to $0.96. Using the non-GAAP measure defined below, diluted earnings per share for fiscal 2007 are expected to be in the range of $1.34 to $1.36.

A schedule showing a reconciliation of the business outlook from GAAP net income and diluted net income per share to the non-GAAP net income and diluted net income per share is included with this release.

Audio Webcast Scheduled

Fister and Porter will host a third quarter 2007 financial results audio webcast today, Oct. 24, 2007, at 2 p.m. (Pacific) / 5 p.m. (Eastern). Attendees are asked to register at the Web site at least 10 minutes prior to the scheduled webcast. An archive of the webcast will be available starting Oct. 24, 2007, at 5 p.m. Pacific time and ending at 5 p.m. Pacific time on Oct. 31, 2007. Webcast access is available at www.cadence.com/company/investor_relations.

About Cadence

Cadence enables global electronic-design innovation and plays an essential role in the creation of today's integrated circuits and electronics. Customers use Cadence® software and hardware, methodologies, and services to design and verify advanced semiconductors, consumer electronics, networking and telecommunications equipment, and computer systems. Cadence reported 2006 revenues of approximately $1.5 billion, and has approximately 5,300 employees. The company is headquartered in San Jose, Calif., with sales offices, design centers, and research facilities around the world to serve the global electronics industry. More information about the company, its products, and services is available at www.cadence.com.

Cadence is a registered trademark and the Cadence logo is a trademark of Cadence Design Systems, Inc. All other trademarks are the property of their respective owners.

The statements contained above regarding the company's third quarter 2007 results, those contained in the Business Outlook section above and the statements by Mike Fister and Bill Porter include forward-looking statements based on current expectations or beliefs, as well as a number of preliminary assumptions about future events that are subject to factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Readers are cautioned not to put undue reliance on these forward-looking statements, which are not a guarantee of future performance and are subject to a number of uncertainties and other factors, many of which are outside Cadence's control, including, among others: Cadence's ability to compete successfully in the design automation product and the commercial electronic design and methodology services industries; the mix of products and services sold and the timing of significant orders for its products; economic uncertainty; fluctuations in rates of exchange between the U.S. dollar and the currencies of other countries in which Cadence does business; and the acquisition of other companies or technologies or the failure to successfully integrate those it acquires.

For a detailed discussion of these and other cautionary statements, please refer to the company's filings with the Securities and Exchange Commission. These include the company's Annual Report on Form 10-K for the year ended Dec. 30, 2006 and the company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2007.

GAAP to non-GAAP Reconciliation

Cadence management evaluates and makes operating decisions using various operating measures. These measures are generally based on the revenues of its product, maintenance and services business operations and certain costs of those operations, such as cost of revenues, research and development, sales and marketing and general and administrative expenses. One such measure is non-GAAP net income, which is a non-GAAP financial measure under Section 101 of Regulation G under the Securities Exchange Act of 1934, as amended. This measure consists of GAAP net income excluding, as applicable, amortization of intangible assets, stock-based compensation expense, in-process research and development charges, integration and acquisition-related costs, gains and expenses related to non-qualified deferred compensation plan assets, executive severance payments, restructuring charges and credits (primarily related to excess facilities), losses on extinguishment of debt and equity in losses (income) from investments. Intangible assets consist primarily of purchased or licensed technology, backlog, patents, trademarks, distribution rights, customer contracts and related relationships and non-compete agreements. Non-GAAP net income is adjusted by the amount of additional taxes or tax benefit that the company would accrue if it used non-GAAP results instead of GAAP results to calculate the company's tax liability.

Management believes it is useful in measuring Cadence's operations to exclude amortization of intangibles, in-process research and development and integration and acquisition-related costs because these costs are primarily fixed at the time of an acquisition and generally cannot be changed by management in the short term. In addition, management believes it is useful to exclude stock-based compensation expense because it enhances investors' ability to review Cadence's business from the same perspective as Cadence's management, which believes that stock-based compensation expense is not directly attributable to the underlying performance of the company's business operations. Management also believes that it is useful to exclude restructuring charges and credits. Cadence has dramatically reduced the size of its design services business and portions of its product and maintenance businesses over the past several years. As a result, in 2001, 2002 and 2003, Cadence's GAAP statements of operations included significant charges relating to such restructurings. Management believes that in measuring the company's operations it is useful to exclude any such restructuring charges and credits because its level of restructuring activities has significantly decreased. Management also believes it is useful to exclude executive severance costs as these costs do not occur frequently. Management also believes it is useful to exclude gains and expenses related to its non-qualified deferred compensation plan assets as these gains and expenses are not part of Cadence's direct costs of operations, but reflect changes in the value of assets held in the plan. Finally, management also believes it is useful to exclude the equity in losses (income) from investments, as these items are not part of Cadence's direct cost of operations. Rather, these are non-operating items that are included in other income (expense) and are part of the company's investment activities.

Management believes that non-GAAP net income provides useful supplemental information to management and investors regarding the performance of the company's business operations and facilitates comparisons to our historical operating results. Management also uses this information internally for forecasting and budgeting. Non-GAAP financial measures should not be considered as a substitute for measures of financial performance prepared in accordance with GAAP. Investors and potential investors are encouraged to review the reconciliation of non-GAAP financial measures contained within this press release with their most directly comparable GAAP financial results.

The following tables reconcile the specific items excluded from GAAP net income in the calculation of non-GAAP net income for the periods shown below:

Net Income Reconciliation                            Quarters Ended
                                              ----------------------------
                                              September 29,  September 30,
                                                  2007           2006
                                              -------------  -------------
                                                      (unaudited)
(in thousands)
Net income on a GAAP basis                    $      72,732  $      42,060
   Amortization of acquired intangibles              12,003         12,248
   Stock-based compensation expense                  24,119         24,273
   Non-qualified deferred compensation expense        2,876           (864)
   Restructuring and other charges (credits)         (7,066)           (15)
   Write-off of acquired in-process technology        2,678              -
   Integration and acquisition-related costs            301            376
   Equity in losses from investments, gain on
    non-qualified deferred compensation plan
    assets - recorded in Other income, net              444          1,187
   Income tax effect of non-GAAP adjustments        (10,722)         2,125
                                              -------------  -------------
Net income on a non-GAAP basis                $      97,365  $      81,390
                                              =============  =============



Diluted Net Income per Share Reconciliation          Quarters Ended
                                              ----------------------------
                                              September 29,  September 30,
                                                  2007           2006
                                              -------------  -------------
                                                      (unaudited)
(in thousands, except per share data)
Diluted net income per share on a GAAP basis  $        0.24  $        0.14
   Amortization of acquired intangibles                0.04           0.04
   Stock-based compensation expense                    0.08           0.08
   Non-qualified deferred compensation expense         0.01              -
   Restructuring and other charges (credits)          (0.02)             -
   Write-off of acquired in-process technology         0.01              -
   Integration and acquisition-related costs              -              -
   Equity in losses from investments, gain on
    non-qualified deferred compensation plan
    assets - recorded in Other income, net                -              -
   Income tax effect of non-GAAP adjustments          (0.03)             -
                                              -------------  -------------
Diluted net income per share on a non-GAAP
 basis                                        $        0.33  $        0.26
                                              =============  =============
Shares used in calculation of diluted net
 income per share --GAAP                            299,506        312,266
Shares used in calculation of diluted net
 income per share --non-GAAP (A)                    299,506        312,266

(A)Shares used in the calculation of GAAP earnings per share are expected
to be the same as shares used in the calculation of non-GAAP earnings per
share, except when the company reports a GAAP loss and non-GAAP income, or
GAAP income and a non-GAAP loss.

Investors are encouraged to look at GAAP results as the best measure of financial performance. For example, amortization of intangibles or in-process technology are important to consider because they may represent initial expenditures that under GAAP are reported across future fiscal periods. Likewise, stock-based compensation expense is an obligation of the company that should be considered. Restructuring charges can be triggered by acquisitions or product adjustments as well as overall company performance within a given business environment. Losses on extinguishment of debt can be incurred on remaining convertible notes. All of these metrics are important to financial performance generally.

Though Cadence management finds its non-GAAP measure is useful in evaluating the performance of Cadence's business, its reliance on this measure is limited because items excluded from such measures often have a material effect on Cadence's earnings and earnings per share calculated in accordance with GAAP. Therefore, Cadence management typically uses its non-GAAP earnings and earnings per share measures, in conjunction with GAAP earnings and earnings per share measures, to address these limitations.

Cadence believes that presenting its non-GAAP measure of earnings and earnings per share provides investors with an additional tool for evaluating the performance of the company's business, which management uses in its own evaluation of performance, and an additional baseline for assessing the future earnings potential of the company. While the GAAP results are more complete, the company prefers to allow investors to have this supplemental measure since, with reconciliation to GAAP, it may provide additional insight into its financial results.

Cadence expects that its corporate representatives will meet privately during the quarter with investors, the media, investment analysts and others. At these meetings, Cadence may reiterate the Business Outlook published in this press release. At the same time, Cadence will keep this press release, including the outlook, publicly available on its Web site.

Prior to the start of the Quiet Period (described below), the public may continue to rely on the Business Outlook contained herein as still being Cadence's current expectations on matters covered unless Cadence publishes a notice stating otherwise.

Beginning Dec. 14, 2007, Cadence will observe a "Quiet Period" during which the Business Outlook as provided in this press release and the company's most recent annual report on Form 10-K and quarterly report on Form 10-Q no longer constitute the company's current expectations. During the Quiet Period, the Business Outlook in these documents should be considered to be historical, speaking as of prior to the Quiet Period only and not subject to update by the company. During the Quiet Period, Cadence representatives will not comment on Cadence's business outlook or its financial results or expectations. The Quiet Period will extend until the day when Cadence's Fourth Quarter 2007 Earnings Release is published, which is currently scheduled for Jan. 30, 2008.

                       Cadence Design Systems, Inc.
                  Condensed Consolidated Balance Sheets
                 September 29, 2007 and December 30, 2006
                              (In thousands)
                                (Unaudited)


                                              September 29,   December 30,
                                                  2007            2006
                                              -------------   -------------

Current Assets:
  Cash and cash equivalents                   $     935,587   $     934,342
  Short-term investments                             15,654          24,089
  Receivables, net of allowances of $2,499
   and $3,804, respectively                         278,200         238,438
  Inventories                                        37,867          37,179
  Prepaid expenses and other                        111,554          77,957
                                              -------------   -------------
    Total current assets                          1,378,862       1,312,005

Property, plant and equipment, net of
 accumulated depreciation of $612,206
 and $615,768, respectively                         332,519         354,575
Goodwill                                          1,311,087       1,267,579
Acquired intangibles, net                           139,457         112,738
Installment contract receivables                    221,520         149,584
Other assets                                        355,830         246,341
                                              -------------   -------------
Total Assets                                  $   3,739,275   $   3,442,822
                                              =============   =============

Current Liabilities:
  Convertible notes                           $     230,385   $           -
  Current portion of long-term debt                       -          28,000
  Accounts payable and accrued liabilities          241,737         259,790
  Current portion of deferred revenue               241,318         260,275
                                              -------------   -------------
    Total current liabilities                       713,440         548,065
                                              -------------   -------------

Long-term Liabilities:
  Long-term portion of deferred revenue             124,548          95,018
  Convertible notes                                 500,000         730,385
  Other long-term liabilities                       448,439         370,063
                                              -------------   -------------
    Total long-term liabilities                   1,072,987       1,195,466
                                              -------------   -------------

Stockholders' Equity                              1,952,848       1,699,291
                                              -------------   -------------
Total Liabilities and Stockholders' Equity    $   3,739,275   $   3,442,822
                                              =============   =============



                       Cadence Design Systems, Inc.
                 Condensed Consolidated Income Statements
      For the Quarters and Nine Months Ended September 29, 2007 and
                          September 30, 2006
                 (In thousands, except per share amounts)
                                (Unaudited)



                                      Quarters Ended    Nine Months Ended
                                   ------------------- -------------------
                                   Sept. 29, Sept. 30, Sept. 29, Sept. 30,
                                     2007       2006     2007      2006
                                   --------- --------- --------- ---------
Revenue:
  Product                          $ 273,799 $ 244,561 $ 775,496 $ 684,826
  Services                            31,225    34,262    95,963    99,798
  Maintenance                         95,900    87,325   285,611   268,251
                                   --------- --------- --------- ---------
    Total revenue                    400,924   366,148 1,157,070 1,052,875
                                   --------- --------- --------- ---------

Costs and Expenses:
  Cost of product                     13,823    14,097    42,302    54,669
  Cost of services                    23,364    23,034    70,421    70,995
  Cost of maintenance                 15,217    15,604    45,635    47,514
  Marketing and sales                 97,163    97,499   297,924   289,064
  Research and development           125,391   110,335   365,418   342,133
  General and administrative          40,747    35,240   123,166   109,267
  Amortization of acquired
   intangibles                         4,739     4,606    13,661    17,982
  Restructuring and other charges
   (credits)                          (7,066)      (15)   (9,584)     (726)
  Write-off of acquired in-process
   technology                          2,678         -     2,678       900
                                   --------- --------- --------- ---------
    Total costs and expenses         316,056   300,400   951,621   931,798
                                   --------- --------- --------- ---------
      Income from operations          84,868    65,748   205,449   121,077

  Interest expense                    (2,849)   (2,959)   (9,373)   (9,880)
  Other income, net                   14,201     9,993    47,938    53,191
                                   --------- --------- --------- ---------
      Income before provision for
       income taxes and cumulative
       effect of change in
       accounting principle           96,220    72,782   244,014   164,388

  Provision for income taxes          23,488    30,722    67,265    70,579
                                   --------- --------- --------- ---------
  Net income before cumulative
   effect of change in
   accounting principle               72,732    42,060   176,749    93,809

  Cumulative effect of change in
   accounting principle, net of tax        -         -         -       418
                                   --------- --------- --------- ---------
      Net income                   $  72,732 $  42,060 $ 176,749 $  94,227
                                   ========= ========= ========= =========
Net income per share before
 cumulative effect of change in
 accounting principle:
    Basic                          $    0.27 $    0.15 $    0.65 $    0.33
                                   ========= ========= ========= =========
    Diluted                        $    0.24 $    0.14 $    0.60 $    0.30
                                   ========= ========= ========= =========
Net income per share after
 cumulative effect of change in
 accounting principle:
    Basic                          $    0.27 $    0.15 $    0.65 $    0.34
                                   ========= ========= ========= =========
    Diluted                        $    0.24 $    0.14 $    0.60 $    0.30
                                   ========= ========= ========= =========
Weighted average common shares
 outstanding - basic                 272,977   279,329   272,354   281,077
                                   ========= ========= ========= =========
Weighted average common shares
 outstanding - diluted               299,506   312,266   297,783   314,190
                                   ========= ========= ========= =========




                       Cadence Design Systems, Inc.
              Condensed Consolidated Statements of Cash Flows
    For the Nine Months Ended September 29, 2007 and September 30, 2006
                              (In thousands)
                                (Unaudited)


                                                   Nine Months Ended
                                             -----------------------------
                                             September 29,   September 30,
                                                 2007            2006
                                             -------------   -------------
Cash and Cash Equivalents at Beginning of
 Period                                       $    934,342    $    861,315
                                             -------------   -------------
Cash Flows from Operating Activities:
   Net income                                      176,749          94,227
   Adjustments to reconcile net income to net
    cash provided by operating activities:
      Cumulative effect of change in
       accounting principle                              -            (418)
      Depreciation and amortization                 96,798         113,862
      Stock-based compensation                      78,828          80,437
      Equity in loss from investments, net           2,504             900
      Gain on investments, net                     (16,608)        (25,600)
      Gain on sale and leaseback of land and
       buildings                                   (12,606)              -
      Write-down of investment securities            2,550           1,429
      Write-off of acquired in-process
       technology                                    2,678             900
      Non-cash restructuring and other
       charges (credits)                            (7,106)              -
      Tax benefit of call options                    7,036           3,969
      Deferred income taxes                          4,848          13,697
      Proceeds from the sale of receivables,
        net                                        163,549         131,404
      Recoveries for gains on trade accounts
       receivable and sales returns                   (975)         (3,727)
      Other non-cash items                           8,525           4,157
      Changes in operating assets and
       liabilities, net of effect of acquired
       businesses:
         Receivables                                 9,053          77,489
         Installment contract receivables         (273,301)       (195,038)
         Inventories                                  (681)         (2,777)
         Prepaid expenses and other                (23,229)         (9,368)
         Other assets                               (2,027)          5,108
         Accounts payable and accrued
          liabilities                              (35,516)       (107,147)
         Deferred revenue                            9,411          13,275
         Other long-term liabilities                18,448          19,714
                                             -------------   -------------
            Net cash provided by operating
             activities                            208,928         216,493
                                             -------------   -------------
Cash Flows from Investing Activities:
  Proceeds from sale of available-for-sale
   securities                                        6,271           5,542
  Proceeds from sale of short-term
   investments                                         197               -
  Proceeds from the sale of long-term
   investments                                       6,323          21,599
  Proceeds from sale of property, plant and
   equipment                                        46,500               -
  Purchases of property, plant and equipment       (57,405)        (48,270)
  Purchases of software licenses                         -          (6,409)
  Investment in venture capital partnerships
   and equity investments                           (3,214)         (2,000)
  Cash paid in business combinations and
   asset acquisitions, net of cash acquired,
   and acquisition of intangibles                  (74,117)        (65,352)
                                             -------------   -------------
           Net cash used for investing
            activities                             (75,445)        (94,890)
                                             -------------   -------------
Cash Flows from Financing Activities:
  Principal payments on term loan                  (28,000)        (99,000)
  Tax benefit from employee stock
   transactions                                     20,727           7,556
  Proceeds from issuance of common stock           249,006         126,315
  Purchases of treasury stock                     (384,151)       (258,384)
  Other                                              8,558               -
                                             -------------   -------------
           Net cash used for financing
            activities                            (133,860)       (223,513)
                                             -------------   -------------
Effect of exchange rate changes on cash and
 cash equivalents                                    1,622          (1,895)
                                             -------------   -------------
Increase (decrease) in cash and cash
 equivalents                                         1,245        (103,805)
                                             -------------   -------------
Cash and Cash Equivalents at End of Period    $    935,587    $    757,510
                                             =============   =============



                       Cadence Design Systems, Inc.
                         As of October 24, 2007
            Impact of Non-GAAP Adjustments on Forward Looking 
                      Diluted Net Income Per Share
                              (Unaudited)


                                        Quarter ended        Year ended
                                      December 29, 2007  December 29, 2007
                                      -----------------  -----------------
                                          Forecast           Forecast
                                      -----------------  -----------------

Diluted net income per share on a
 GAAP basis                            $ 0.34 to $ 0.36   $ 0.94 to $ 0.96

  Amortization of acquired
   intangibles                               0.04               0.16
  Stock-based compensation expense           0.09               0.35
  Non-qualified deferred compensation
   expense                                      -               0.02
  Restructuring and other charges
   (credits)                                    -              (0.03)
  Write-off of acquired in-process
   technology                                   -               0.01
  Integration and acquisition-related
   costs                                        -                  -
  Equity in losses from investments,
   gain on non-qualified deferred
   compensation plan assets                     -              (0.01)
  Income tax effect of non-GAAP
   adjustments                              (0.02)             (0.10)

                                      -----------------  -----------------
Diluted net income per share on a
 non-GAAP basis                        $ 0.45 to $ 0.47   $ 1.34 to $ 1.36
                                      =================  =================



                       Cadence Design Systems, Inc.
                         As of October 24, 2007
    Impact of Non-GAAP Adjustments on Forward Looking Net Income
                              (Unaudited)


                                        Quarter ended       Year ended
                                      December 29, 2007  December 29, 2007
                                      -----------------  -----------------
($ in Millions)                            Forecast           Forecast
                                      -----------------  -----------------

Net income on a GAAP basis             $ 102 to $ 108     $ 279 to $ 285

  Amortization of acquired
   intangibles                               13                 47
  Stock-based compensation expense           25                104
  Non-qualified deferred compensation
   expense                                    -                  7
  Restructuring and other charges
   (credits)                                  -                (10)
  Write-off of acquired in-process
   technology                                 -                  3
  Integration and acquisition-related
   costs                                      -                  1
  Equity in losses from investments,
   gain on non-qualified deferred
   compensation plan assets                   1                 (1)
  Income tax effect of non-GAAP
   adjustments                               (6)               (31)

                                      -----------------  -----------------
Net income on a non-GAAP basis         $ 135 to $ 141     $ 399 to $ 405
                                      =================  =================



                       Cadence Design Systems, Inc.
                                (Unaudited)


Revenue Mix by Geography (% of Total Revenue)

                       2005                            2006
           =============================   =============================
GEOGRAPHY   Q1    Q2    Q3    Q4    Year    Q1    Q2    Q3    Q4    Year
           ====  ====  ====  ====   ====   ====  ====  ====  ====   ====

 North
  America   46%   49%   53%   42%    48%    51%   48%   54%   60%    54%
 Europe     16%   17%   21%   20%    18%    19%   18%   22%   19%    19%
 Japan      30%   25%   20%   26%    25%    21%   24%   13%   10%    17%
 Asia        8%    9%    6%   12%     9%     9%   10%   11%   11%    10%
Total      100%  100%  100%  100%   100%   100%  100%  100%  100%   100%


                 2007
           ================
GEOGRAPHY   Q1    Q2    Q3
           ====  ====  ====

 North
  America   48%   52%   41%
 Europe     15%   17%   25%
 Japan      27%   14%   22%
 Asia       10%   17%   12%
Total      100%  100%  100%



Revenue Mix by Product Group (% of Total Revenue)

                               2005                        2006
                    =========================   =========================
PRODUCT GROUP        Q1   Q2   Q3   Q4   Year    Q1   Q2   Q3   Q4   Year
                    ==== ==== ==== ====  ====   ==== ==== ==== ====  ====

 Functional
  Verification       20%  19%  21%  25%   21%    26%  22%  24%  23%   24%
 Digital IC Design   27%  23%  26%  29%   28%    20%  26%  19%  26%   24%
 Custom IC Design    23%  31%  27%  22%   25%    27%  27%  30%  26%   27%
 Design for
  Manufacturing       9%   9%   9%   8%    9%     8%   8%   8%   6%    7%
 System Interconnect 10%   9%   8%   7%    8%     9%   8%  10%  11%    9%
 Services & Other    11%   9%   9%   9%    9%    10%   9%   9%   8%    9%
Total               100% 100% 100% 100%  100%   100% 100% 100% 100%  100%



                         2007
                    ==============
PRODUCT GROUP        Q1   Q2   Q3
                    ==== ==== ====

 Functional
  Verification       24%  24%  20%
 Digital IC Design   26%  29%  27%
 Custom IC Design    24%  24%  32%
 Design for
  Manufacturing       7%   7%   6%
 System Interconnect 10%   8%   7%
 Services & Other     9%   8%   8%
Total               100% 100% 100%


Note: Product Group total revenue includes Product + Maintenance

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