Cadence Design Systems Inc (NASDAQ:CDNS) Q3 2019 Earnings Conference Call - Final Transcript

Good afternoon. My name is Josh, and I will be your conference operator today. At this time, I would like to welcome everyone to Cadence Third Quarter 2019 Earnings Conference Call.

All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions]

Thank you. I will now turn the call over to Alan Lindstrom, Senior Group Director of Investor Relations for Cadence. Please go ahead.

Thank you, Josh. And I would like to welcome everyone to our third quarter 2019 earnings conference call. I am joined today by Lip-Bu Tan, CEO; and John Wall, Senior Vice President and CFO.

The webcast of this call is available through our website, cadence.com, and will be archived through the 30th of December, 2019. A copy of today's prepared remarks will also be available on our website at the conclusion of the call today.

Please note that the discussion today will contain forward-looking statements, and that actual results may differ materially from those expectations. For an information on the factors that could cause a difference in our results, please refer to our filings with the Securities and Exchange Commission. These include Cadence's most recent reports on Form 10-K and Form 10-Q, including the Company's future filings and the cautionary comments regarding forward-looking statements in the earnings press release we issued today.

In addition to financial results prepared in accordance with Generally Accepted Accounting Principles or GAAP, we will also present certain non-GAAP financial measures today. Cadence management believes that in addition to using GAAP results in evaluating our business, it can also be useful to review results using certain non-GAAP financial measures. Investors and potential investors are encouraged to review the reconciliation of non-GAAP financial measures with their most direct comparable GAAP financial results.

The reconciliations are available at the Investor Relations section of cadence.com. Copies of today's press release dated, October 21, 2019, for the quarter ended September 28, 2019, related financial tables, and the CFO commentary are also available on our website

And now I'll turn the call over to Lip-Bu.

Good afternoon, everyone. And thank you for joining us today. I'm pleased to report that Cadence achieved excellent operating results for the third quarter of 2019, delivering 9% year-over-year revenue growth. Based on our strong execution and strength of our technology and business, we are again raising our outlook for the year.

Given the uncertainty of the ongoing trade situations with China, our outlook assume current export limitations remain in place for the rest of the year. John will provide more detail on our outlook, shortly. While global economy and geo-political uncertainty continues, long-term trends such as AI, 5G, Cloud and IoT continues to drive strong design activity.

The move to domain specific computing and system companies building custom silicon, as well as a host of innovative silicon startups, are all pushing the technology envelope, and driving the need for high-performance, low-power computing, high bandwidth connectivity, and high density