Cadence Design Systems Inc (NASDAQ:CDNS) Q3 2020 Earnings Conference Call - Final Transcript

Good afternoon. My name is Mike and I will be your conference operator today. At this time, I would like to welcome everyone to the Cadence Third Quarter 2020 Earnings Conference Call. [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, Mike. And I would like to welcome everyone to our third quarter 2020 earnings conference call. I am joined today by Lip -Bu Tan, Chief Executive Officer; and John Wall, Senior Vice President and Chief Financial Officer. The webcast of this call is available through our website cadence.com and will be archived through December 18th, 2020. A copy of today's prepared remarks will also be available on our website at the conclusion of today's call.

Please note that the discussion today will contain forward-looking statements and actual results may differ materially from those expectations. For information on factors that could cause 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 19th, 2020 for the quarter ended September 26th, 2020, related financial tables and the CFO commentary are also available on our website. Note that Cadence is continuing to adhere to social distancing practices and therefore we are conducting today's earnings call from our respective remote locations. Apologies in advance if there are any glitches or hand-offs that take a little longer than usual.

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 outstanding financial results for the third quarter of 2020. We exceeded our financial outlook on all key metrics as the Cadence team continues to successfully navigate through challenges posed by the pandemic. We also raised our outlook for the year. John will provide more details in a moment. The data-centric revolution led by AI, data analytics, hyperscale computing continues to fuel strong semiconductor and system design activity and our Intelligent System Design strategy uniquely position us to enable our customers to accelerate their innovation. Now let us move on with the major highlights for the third quarter.

Design Excellence is the foundational layer of our strategy and includes our Core EDA chip design solutions