( ESNUG 593 Item 06 ) --------------------------------------------- [04/13/23]
Subject: Snarkies on CDNS/SNPS margins, backlog, growth and Anirudh/Fister
Editor's Note: Every time I publish, the readers send me these
concise replys that are sometimes insightful, but are more often
cynical -- which is why I call them "snarkies". Enjoy. - John
ANIRUDH'S KICKASS 22Q4: So then 10 days ago when CDNS reported it's kickass
FY22 earnings, Wall St. loved Anirudh because in FY22 his backlog grew
$1.4 billion to be $5.8 billion and Jay revised his CDNS FY23 estimate to
$4.039 billion (up 13%) with a 42% margin.
Cadence even got CNBC airtime for it's kickass 22Q4.
(click to view video)
But to be fair, Aart's SNPS also kicked ass in its FY22 with a whopping
$7.1 billion backlog (that didn't change significantly) and Jay revised
his SNPS FY23 estimate to be $5.786 billion (up 21%) with a 34% margin.
Charles and Jay gave both CDNS and SNPS each a "Buy" rating.
- Two Wall St. analysts crown Anirudh as 2022 King of EDA
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How can Anirudh get a 42% margin while Sassine only get 34%?
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I like that. Margin is the meat of a stock.
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SNPS getting a lower margin makes sense because IP takes more
employees-per-sales to support as compared to straight SW.
If CDNS sold more IP, their margin would drop to SNPS levels.
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WTF?
How did CDNS backlog go from $1.4 billion to $5.8 billion in just
one year?
Was this from CDNS getting into Intel?
No way Intel is a $4.4 billion bump.
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Why did the SNPS backlog not change, while the CDNS backlog
grew over $4 billion?
Did overall EDA grow $4 billion in 2022 and SNPS missed it?
Something doesn't add up here.
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How did CDNS backlog explode while SNPS backlog was flat?
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There's a backlog story there. You should investigate.
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Jay's talk at DAC 22 only glanced at Core EDA revenue.
Instead he focused on Synopsys/Cadence/Siemens/Ansys 2023 backlog.
Synopsys crushed the other three in backlog.
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I know you're a Cadence fanboy, Cooley, but if you're showing Anirudh's
CNBC interview, you should also show Aart's CNBC interview.
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(click to view video)
You should at least try to show both sides when you write your BS blog.
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Jay estimates 2023 CDNS will be up 13% and SNPS up 21%.
Shouldn't that make SNPS a better investment?
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From the 10-K's of CDNS and SNPS
It's public info. For the past 5 years, CDNS employees earned
24% more than SNPS employees. For 2022 it was $350K vs $265K.
You might want to write about this, John.
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Cadence crushed 2022. They deserve applause for it.
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Now I wished I had bought CDNS when it was at $56 in March 2020.
The COVID panic was everywhere so CDNS was at a serious discount.
Now it's almost $190 now. I [bleeped] up.
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Editor's Note: I'm not stupid. I'm fairly certain at least two of the
above snarkies came from non-neutral EDA vendors. I'll let you guess
which two! :) - John
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THE BIG PICTURE: So we won't know for a few quarters if Anirudh gets to keep
his "Core EDA crown" in 2023 until these new definitions are worked out.
But the big picture is 15 years ago when Mike Fister and four of his VPs
all resigned on the same day from CDNS back in 2008, Fister left CDNS in
a smoldering ruins -- and Aart's SNPS was the undisputed King of All EDA.
To go from absolute fiasco back then ... to today where CDNS is the King
of 2022 Core EDA and we're puzzling out if it's still King in 2023 ...
... in the big picture THAT is a solid "win" for Anirudh.
- Two Wall St. analysts crown Anirudh as 2022 King of EDA
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I normally don't credit CEOs for anything that their company does because
so many CEOs are nothing more than pricey figure heads who take credit
for their underling's labor.
In this case Anirudh is that rare CEO who took a dying Cadence and turned
it around.
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Anirudh pulled Cadence from the ashes.
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I credit Lip-Bu Tan for this because Lip-Bu was smart enough to bring
in Anirudh. No LBT, no Anirudh, no Cadence turnaround.
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Yay, Anirudh!
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Good graphics there. Fister was a train wreck.
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This is why Devgan is paid the big bucks.
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Anirudh was important, yes, but it's all the Cadence employees who were
under him that made the CDNS recovery happen.
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Can you worship Anirudh any more, John?
How much did Cadence pay you to write this crap?
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Good save.
I was about to bust you for making Anirudh the King of EDA, when he's
really just caught up to Aart.
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I like Anirudh.
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That rusted train graphic representing Cadence in 2008 is inaccurate.
It should have been a burning rusted train graphic.
With some dead Cadence employees spewn around the wreck.
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Where's Fister now?
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What you're missing here is Anirudh isn't just technically skilled. He
also knows how to sweet talk customers.
He could be techically brilliant, but without Sassine-like sales skills,
Anirudh would have failed.
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I think you give too much credit to Anirudh. If IC Compiler hadn't
failed, Cadence wouldn't have had that PnR opening to take advantage of.
Luck played a big part of Cadence recovering from Fister.
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Anirudh isn't carefree.
He's very much like Joe Sawicki, if you fail to deliver Anirudh will come
down hard on you.
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As long as my CDNS shares keeps going up in price, I'm happy.
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Editor's Note: do you know how difficult it is to find a horse
race pic where one horse is 6% ahead of the other horse? - John
- Two Wall St. analysts crown Anirudh as 2022 King of EDA
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When you say 6% ahead, do you mean 6% of the length of the first horse?
6% of the length of the second horse? 6% of the entire race track?
Or 6% the width of the picture frame?
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You have the CDNS horse 1/2 a horse length ahead of the SNPS horse.
That's not a 6% difference. It's a 50% difference.
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Snarkies on CDNS/SNPS margins, backlog, growth and Anirudh/Fister
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