SAN JOSE -- Cadence Design Systems' strategy to boost its focus on systems-level companies is paying off, company executives told analysts yesterday.

"Clearly our system design enablement strategy is working [with] a couple of successful wins in the system side, in the medical, in the mil/aero and automotive," said President and CEO Lip-Bu Tan on a conference call. "The system company need(s) a whole suite of requirement, not just tool, not just IP, not just the PCB board, system analysis and also the hardware software co-design, co-verification in a very expanded way. We are in a unique position to provide that to our customer, and that’s why system companies like our offerings."

The EDA software company, which traditionally had been closely tied to the semiconductor arena, sees better margins in the broader market. 

"Some of these verticals are very good and as you know their margin, their system and the service providing, they are much broader and much profitable. And clearly the margin over time should be better than semiconductor," Tan said.

The trickle down effect has benefited Cadence's PCB design software sales. On Oct. 20 Cadence reported third-quarter revenue of $400 million, up 9% year-over-year. Its PCB (system interconnect and analysis) sales were $40 million for the quarter, up from $36.6 million a year ago.

Tan reiterated that its PCB design business is doing well because of recent moves such as the acquisition of Sigrity and its subsequent integration with Allegro. "Customers really need not just (the) tool, not just IP, and also the whole PC board, the whole system, the whole system analysis. We have been investing the last five, six years and we’re going to continue, and driving even more success."

Ed.: This report has been updated to reflect corrected PCB revenue for third quarter 2013. 

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