Cadence Design Systems’ (CDNS) Functional Verification product category reported $115.4 million in revenue in 4Q17, a fall of 1.6% YoY (year-over-year). Softness in the global hardware market likely influenced this revenue fall.
In the last three quarters, CDNS has maintained a falling revenue trend in its Functional Verification product group. In 2017, the product group’s revenue fell 5.6% on an annual basis to nearly $437 million.
In the graph above, we can see the revenue trend in the Functional Verification division, which includes emulation and prototyping hardware, over the last five quarters. During the period, the division’s revenue fell at a CAGR (compound annual growth rate) of 0.4%.
Newly launched products to offset headwinds
The launch of new products such as the parallel logic simulator Xcelium in the Functional Verification category has allowed the company to gain more than 25 new clients. Xcelium has gained popularity, attracting more than 90 new customers since its launch in February 2017.
Even Palladium and Protium did good business in 4Q17, creating a significant backlog of orders. Furthermore, CDNS attracted 20 new Palladium Z1 clients, of which half were added in 4Q17 alone. The growing popularity of the new Protium S1 FPGA-Based Prototyping System has helped CDNS to gain 15 new customers and renew contracts for nine clients.
Leading semiconductor companies Samsung, NVIDIA (NVDA), Texas Instruments (TXN), and Qualcomm (QCOM) are using the company’s formal verification solution. CDNS also believes that it nearly doubled its number of new customers in 2017.