Synopsys SNPS
Q4 2011 Earnings Call Transcript

Operator: Rich Valera, Needham & Company.

Rich Valera - Needham & Company: I guess to start if off on the acquisition, Aart, with all due respect, in your comments you suggested that Magma's complementary to you guys, but most people would suggest, I think, that they have quite a bit of overlap with your core businesses. So just wondering how you think about how much overlap is there, how much do you see as not overlapping, and how do you deal with that potentially from a regulatory perspective?

Dr. Aart J. de Geus - Chairman and CEO: Well, as you know, EDA is a very competitive field with constant innovation and many tools with many differing capabilities and often catering to different sub-segments of the market. Simultaneously, as I highlighted in my preamble, what we're seeing right now and when I mean right now, I'm really meaning the last 18 months or so, is just a tremendous acceleration of technology demand, and I think it's partially due to the fact that there is so much opportunity in some of the mobile devices that demand really state-of-the-art technology that the advances needed to just keep up with what the customers need will require substantial R&D investment and also substantial technical support, and so it's in that context that there is no question that we will be able to jointly much better support the customer. As a matter of fact, we have already gotten a wave of very positive feedback from the customers that we've spoken to.

Rich Valera - Needham & Company: Just a follow-up on that. Have you done any sort of preliminary antitrust analysis, do you have any feel for how this might be viewed? Obviously, Magma much smaller in scale than the other three big players, which I think would be something in your favor, but still a lot of overlap. Do you have any initial feel for that, anything you can share with us?

Dr. Aart J. de Geus - Chairman and CEO: Of course, I cannot go into any of the details, but we understand perfectly the process of going through the governmental steps. And, of course, we do our homework beforehand very carefully, but in that context, we will engage with the government on these issues as we have done in the past and our confidence in the outcome.

Rich Valera - Needham & Company: Just one quick one, if I could, for Brain. When you talk about being somewhat accretive or modestly accretive in the fiscal '12, does that include the expected loss of deferred revenue from Magma?

Brian Beattie - CFO: It does, Rich. Yeah.

Operator: Raj Seth, Cowen and Company.

Raj Seth - Cowen and Company: Aart, if I could follow up on Rich's line of questioning just a bit and congratulations. Actually I think it's quite a good deal. Is your plan – to the extent that you can discuss it at all – is your plan to keep two platforms in digital sort of your Galaxy Platform and Talus where there is overlap? Or would you anticipate over sometime taking sort of the best of both worlds and creating a new sort of optimized (slope) for some of the leading edge customers that you've talked about?

Dr. Aart J. de Geus - Chairman and CEO: Good question and I wish you understand, we cannot comment about specific plans, partially, because these plans can only be finalized or developed once we have closed the deal. But there are two fundamental principles that we follow, and the first principle is a very, very important one, which is do not disrupt the customer. In both our values and maybe our business thinking, it is very clear customers absolutely rely on us for chips that are vital to their success, and we will continue to support them being successful through all of those chips. Simultaneously in the long-term, actually in the short-term, we also follow the principle of understanding where the most rapid developments in technology are needed and as mentioned earlier, the race is very much on a technology, and so long-term, we will obviously deliver more precise roadmaps once this is closed, but long-term, we absolutely have to lead the state-of-the-art. This is important for, not just the EDA industry, it is important for the semiconductor industry, and there are a lot of opportunities there. So, we have a lot of work ahead of us here.