Magma Q2 revenue of $29.7 million exceeds all financial guidance

BANGALORE, INDIA: Magma Design Automation Inc. reported revenue of $29.7 million for its fiscal 2010 second quarter ended Nov. 1, 2009.

“Traction continues to grow for our core Talus platform as well as for our newer products – just last week Hynix announced it is standardizing on FineSim™ for circuit simulation, Toshiba is adopting Quartz for physical verification of advanced flash memory designs, and today we announced Exar selected Titan ADX to accelerate analog design,” said Rajeev Madhavan, chairman and CEO of Magma. “Second-quarter results once again included strong positive cash flow as we exceeded our guidance ranges for revenue and all other financial metrics.”

GAAP results
In accordance with generally accepted accounting principles (GAAP), Magma reported net income of $4.3 million, or $0.09 per share (basic and diluted), for the second quarter, compared to a net loss of $(26.3) million, or $(0.60) per share (basic and diluted), for the year-ago second quarter.

The second quarter of fiscal 2010 was favorably impacted by a non-recurring net tax benefit of $7.7 million, or $0.16 per share (basic), $0.13 per share (diluted), which was primarily due to a discrete adjustment reducing the reserves for foreign taxes.

Non-GAAP results
Magma’s non-GAAP net income was $1.7 million for the second quarter, or $0.03 per share (basic and diluted), which compares to a non-GAAP net loss of $(6.3) million, or $(0.14) per share (basic and diluted), for the year-ago second quarter.

Non-GAAP net income for the second quarter of fiscal 2010 excludes the effects of amortization of developed technology, amortization of intangible assets, stock-based compensation, amortization of debt issuance costs, debt discount and premium accretion, charges associated with losses on equity investments and other investments, restructuring charges, acquisition-related expenses and the related provision for income taxes. In the second quarter Magma generated cash flow from operations of approximately $3.9 million.

Business outlook
For Magma’s fiscal 2010 third quarter, ending Jan. 31, 2010, the company expects total revenue in the range of $29.5 million to $30 million. GAAP net loss per share is expected to be in the range of $(0.14) to $(0.13) and non-GAAP earnings per share (EPS) are expected to be in the range of $0.02 to $0.03.