Cadence Design Systems Inc at Bank of America Global Technology Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Vivek Arya - BofA Global Research (US) - Analyst : I appreciate it. So maybe, John, let's start at the top. Over the last decade or so. We have seen the semiconductor industry essentially grow at the 6%, 7%, 8% kind of pace. But during that timeframe, we have seen your electronic design automation, EDA industry consistently accelerate from 7%, 8% towards double digit and over the last few years, mid-teens. So maybe walk us through what help that acceleration? And then more importantly is, are these kind of growth rates sustainable, right? What are what are the key drivers of that?

Question: Vivek Arya - BofA Global Research (US) - Analyst : What are you seeing in terms of design starts? What are you seeing in terms of computing complexity going up? What are those early leading indicators telling you right now about the next two to five years.

Question: Vivek Arya - BofA Global Research (US) - Analyst : You know, if you had described the different era than and I must repeat that every era has a lot of skeptics also give you a skeptical pointed out, which is the EDA industry definitely benefit from AI., but is it fair to say that you have already seen a lot of those benefits because the number of the products, whether it was copper or BlackBerry or the product that AMD Broadcom, the design of these products started several years ago made, though, is it possible that you have already seen that big first phase of product design and growth could mature for some time before accelerating as this product and the monetization pace? And how do you look at this that no pun intended cadence of how the semiconductor industry is developing AI versus when you see the benefits of this come through for Cadence?

Question: Vivek Arya - BofA Global Research (US) - Analyst : We will actually discuss more about AI. The one question that we always grapple with it from the outside is Cadence has described its growth rate as double digits now in double digits is a very, very wide spectrum.

Question: Vivek Arya - BofA Global Research (US) - Analyst : So as a CFO, what informed you whether it's going to be 10% or 15% or 20% like, but how do you decide that over the next three, four, five years? What are the leading indicators you what is on your dashboard to see where you will be in that group? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 04, 2024 / 5:00PM, CDNS.OQ - Cadence Design Systems Inc at Bank of America Global Technology Conference

Question: Vivek Arya - BofA Global Research (US) - Analyst : One of the topic that I wanted to touch on is your competitor has announced a fairly large acquisition criteria of answers. And obviously, I think we all kind of conceptually understand silicon and systems or electrical and mechanical and the designs that are coming together. How does that impact of Cadence's growth opportunity that does the fact that you have these two large companies getting together, does that foreclosed your growth in any way in the EP out of markets and then how does Cadence respond like will you have to consider large M&A also medium M&A bankers?

Question: Vivek Arya - BofA Global Research (US) - Analyst : (multiple speakers) the equivalent to that combination? Is it different or is it that it's a rising tide? So (multiple speakers)

Question: Vivek Arya - BofA Global Research (US) - Analyst : (multiple speakers) Netflix shipping DVDs or the (multiple speakers)

Question: Vivek Arya - BofA Global Research (US) - Analyst : So if I look at the next, let's say, five years, right? What would what scenarios would make your growth diverge from from your competitors? Or do you think investors should not worry too much about like they are both good companies in a good space, right? Because one has a different mix of IP versus EDA and now right this inorganic asset that you have a largely organic focus, but a different mix of IP. one has more digital than analog. So how are investors supposed to sort which company will do better over the next in five years. How does that landscape shake out (multiple speakers)? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 04, 2024 / 5:00PM, CDNS.OQ - Cadence Design Systems Inc at Bank of America Global Technology Conference

Question: Vivek Arya - BofA Global Research (US) - Analyst : Are customers are willing to pay extra for AI? Let's call them copilot like feature data and enabling, as you mentioned, greater productivity. Are customers willing to pay incrementally for that or you think they're still in a trial stage of?

Question: Vivek Arya - BofA Global Research (US) - Analyst : Extra, do you think is like 10% now? The AI. incremental benefit, right from yes, the value and pricing perspective, how much is that (multiple speakers)?

Question: Vivek Arya - BofA Global Research (US) - Analyst : How does it look, John, at kind of bookings growth for the rest of the year and into early to compare because last year was tough for the semiconductor industry that had actually a lumpy or IB&R analog customers. So as they are just starting to emerge right from the downturn with all the inventory adjustments over, do you think you would start to see that in your bookings improvement in the back half? Or is that more 25 factor for you?

Question: Vivek Arya - BofA Global Research (US) - Analyst : And then just the last question in the two minutes we have I'm [senior], you had the start of the upgrade cycle for your dynamic, we will identify the area right around the corner felt when does that start to show up in numbers and how much of a content or a US industry using versus the Z2/X2? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 04, 2024 / 5:00PM, CDNS.OQ - Cadence Design Systems Inc at Bank of America Global Technology Conference

Question: Vivek Arya - BofA Global Research (US) - Analyst : But does it reiterate done about 10 potential for next year?

Question: Vivek Arya - BofA Global Research (US) - Analyst : Any supply constraints you're facing?

Question: Vivek Arya - BofA Global Research (US) - Analyst : Over the next (multiple speakers)