Cadence Design Systems helps engineers pick up the development tempo. A leader in the market for electronic design automation (EDA) software, Cadence sells and leases software and hardware products used to design integrated circuits (ICs), printed circuit boards (PCBs), and other electronic systems. Electronics manufacturers use its products to build components for wireless devices, networking equipment, and other applications. The company also provides maintenance and support, and offers design and methodology consulting services. Its customers have included NVIDIA, CASIO COMPUTER, and IBM. Cadence gets more than half of its sales from clients based internationally.
Cadence has a broad product line in design software and supplements its capabilities with acquisitions. The company's product strategy is focused around design activities that include functional verification, digital IC design, custom IC design, and system interconnect. Cadence products include Incisive (functional verification), Encounter (digital IC design), Virtuoso (custom design), and Allegro (system interconnect platforms).
With its fortunes tied directly to the highly cyclical semiconductor industry, Cadence's operating results can vary widely from year to year. After a couple of money-losing years, Cadence stemmed its losses in fiscal 2010. The company returned to profitability as customers began to spend more on EDA products and services, and the company drove down operating costs through restructuring. In 2011 Cadence reported smaller profits as it increased spending on marketing, sales, and R&D.
Overall sales increased nearly 25% in 2011 over 2010. Sales growth was driven by a more than 35% increase in product revenues, primarily due to improvements in the global economy, gains in hardware sales and lease revenues, and an increase in sales related to acquisitions. Revenues from maintenance services were up 8% for the year, while other services -- consulting, training, and custom IC design -- rose more than 15%. Cadence saw double-digit sales increases across all geographic regions, as well.
In 2010 Cadence acquired Denali Software for $315 million in cash. Denali's mixture of computer memory software models, design intellectual property (IP), and verification IP dovetailed with Cadence's EDA360 strategy of providing more efficient and cost-effective system component modeling and IP integration.
The next year the company bought Altos Design Automation to extend the functionality of its own chip design product line. Altos specialized in software used to enable speedy and accurate characterization of memory and standard cell libraries, as well as to generate models for systems-on-chip (SoC) implementation. The deal also added new semiconductor customers. In addition, Cadence bought semiconductor design software maker Azuro that year to further extend its expertise in chip design applications.
Then in 2012 it paid $80 million to acquire Sigrity, which provided signal and power integrity technology. Its products help with design and analysis for semiconductor companies and systems manufacturers of such products as printed circuit boards and integrated circuit packages.
The acquisitions continued in 2013 with the purchase of Cosmic Circuits Private Limited, a provider of analog and mixed signal IP cores, and the IP business of Polish firm Evatronix. Also that year it announced it would acquire California-based Tensilica, a provides of IP (intellectual property) cores for dataplane processing, for $380 million.