Good day, ladies and gentlemen, and welcome to the Synopsys special event call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question and answer session. You may register to ask a question at any time by pressing star one on your telephone keypad. To remove yourself from the queue, press star two. As a reminder, today's call is being recorded and will last approximately one hour. At this time, I would like to turn the conference over to Trey Campbell, Senior Vice President, Investor Relations. Thanks, Todd. Good morning, everyone. With us today are Sassine Ghazi, President and CEO of Synopsys, Ajei Gopal, CEO of Ansys, and Shelagh Glaser, CFO of Synopsys. Before we begin, I'd like to remind everyone that during the course of this conference call, Synopsys may discuss forward-looking statements reflecting its views with respect to the proposed transaction between Synopsys and Ansys, including the anticipated benefits and closing of the transaction, market outlook, customer demands, products and business of each company and the combined company, expected combined company future operating results and financial performance, costs and revenue synergies resulting from the transaction, and opportunities, strategies, and technological and software trends, including AI. While these statements represent our best current judgment, expectations, and assumptions as of today, there are many other risks, uncertainties, and factors that could cause actual or our actual results and future events to differ materially from what we expect. In addition to any risks that we highlight during this call, you should carefully consider any other risks and uncertainties that affect the businesses of Synopsys and Ansys described in the Risk Factors section of their respective annual reports on Form 10-K, quarterly reports on Form 10-Q, and other documents filed by either of them from time to time with the SEC, including today's press release. We do not intend to update or revise our forward-looking statements or projections unless required by law. In addition, we will refer to certain non-GAAP financial measures during this call. Reconciliations for certain historical measures of each company can be found in prior earnings releases and financial supplements. Materials related to the transaction and this investor presentation are available at www.synopsysandansystransactionfacts.com. In addition, the prepared remarks will be posted on the transaction website at the conclusion of the call. With that, I'll turn the call over to Sassine. Thank you, Trey, and good morning, everyone. Today, we announced our plan to acquire Ansys, a leader in simulation and analysis, to advance our strategy and create a leader in silicon-to-systems design solutions. This transaction builds on our seven-year strategic partnership, which has achieved strong customer momentum, and now we're taking the next step. The complexity of system design is driving our customers' needs for the fusion of electronics and physics, augmented with AI. We're combining a leader in semiconductor design technology with a leader in simulation and analysis to address this rapidly emerging customer need. This transaction will enhance our silicon-to-systems strategy, both across our core EDA segment and in highly attractive adjacent growth areas where Ansys has an established presence and successful go-to-market experience. The combination will expand our TAM by 1.5x to approximately $28 billion and create significant long-term value for our shareholders. Shelagh will discuss the financials in more detail. At Synopsys, our mission is to empower technology innovators, igniting their ingenuity and maximizing the capabilities of their R&D teams. Delivering on this mission resulted in nearly $6 billion of revenue in 2023, which grew 15% year-over-year with a 35% non-GAAP operating margin. First, let me anchor you on our three strategic priorities: technology and innovation leadership, industry-leading growth, and margin expansion. Innovation is at the heart of what Synopsys has done for the last four decades. Over the last three years, we have established leadership across the EDA stack at today's leading-edge nodes while enabling the industry transition to multi-die. We also pioneered AI and cloud for chip design while developing the next generation IP that is enabling all the leading foundries. Our second strategic priority is industry-leading growth. We achieved a 17% revenue CAGR over the last three years and have expanded into new adjacent growth opportunities in software-defined systems to stay ahead of customer needs. Finally, we have expanded our non-GAAP operating margin by seven points over the last three years and continue to raise the bar, committing to another two points of expansion for this year. All of which has led to shareholder returns that have far outpaced the market. Over the last three years, we have delivered 120% total shareholder return, approximately 3.5x the TSR of the S&P 500. To set the stage for this transaction, let me briefly describe our view of the world, which underpins our strategic priority. We have entered an era of pervasive intelligence, when AI and smart technologies are seamlessly integrated into the fabric of our daily lives, becoming omnipresent and interconnected. This era is being shaped by megatrends, including the rise of AI, the proliferation of silicon everywhere, the growing movement towards software-defined systems, and the looming intersection of electronics and physics. These megatrends are pushing the need for advanced chips and new system design methodologies across verticals such as aerospace, automotive, and industrial equipment. The worlds of semiconductor design and physical simulation and analysis must come together to ensure interconnected systems function properly in real-world settings. Semiconductor companies must now design in a world of high-performance computing with a system approach in mind. Similarly, systems companies must move down to the silicon level to unlock value with purpose-built chips and software-defined systems. This is creating new complexity challenges that this combination will help solve. Chips are being designed at smaller scales than ever, approaching angstrom scale. Silicon, software, and hardware need to be co-designed for optimal results, while systems from connected cars to medical devices must also be able to be monitored and optimized in the field. We have been deliberate in our strategy to expand from silicon to system designs for years. As part of the regular review of our strategic plan in 2021, we identified systems and simulation as a priority for future growth. Today's announcement is a direct result of that process, particularly as we think about how we build on our Ansys partnership to meet our customers' increasingly complex challenges. Since 2017, the two companies have partnered closely to solve design complexity. A great example is the industry-leading digital implementation platform, Fusion Compiler, which integrates power integrity from Ansys RedHawk into a unified offering. Today, the vast majority of Synopsys Fusion Compiler installed base incorporates Ansys technology. Our integration also extended to Synopsys 3D IC Compiler, the industry's first unified platform for multi-die design. Beyond technology integration, we have developed deep joint go-to-market relationships and have both been pioneers in infusing AI into our respective platforms. But what works today to solve design complexity won't suffice in the future. Only by approaching design in novel ways can we meet our customers' rapidly evolving, increasingly complex design needs and shortened development cycles. Our customers are moving from monolithic chips to multi-die systems. These systems are so dense and so complex that they require not only power integrity, but sophisticated structural, thermal, and electromagnetic analysis to deliver high-performing and high-yielding chips. Equally important, customers are moving to co-optimized intelligent systems that require a whole new level of design complexity across multiple domains. As you can see, we need to deepen our integration to deliver unified products that meet these customer needs. Joining forces with Ansys is the next logical step. Ansys is a leader in simulation and analysis, particularly in electronics. According to a third-party survey of simulation users, Ansys has best-in-class technical capabilities and leads in innovating and unlocking new use cases. This positions us to truly fuse our capabilities to deliver unified products that meet our customer needs and create a leader in silicon to systems design solutions. This combination accelerates our strategy on two vectors. On day one, we will significantly expand our portfolio of solutions that we can offer our customers as we work on our integrated product roadmap. This includes not just electronics, but also other physics such as structures, fluids, and optics that are essential across industries. We expect the combined company will benefit not only from immediately accelerating the penetration of high-tech customers through cross-selling opportunities, but also from customers in other high-growth adjacent verticals that are now also demanding multi-domain fusion solutions such as aerospace, auto, and industrials. Ansys' significant presence in these under-penetrated verticals and established go-to-market approach with these customers, which account for nearly half of its revenue, represents a huge opportunity for the combined company.... Additionally, I'll note that our Chief Revenue Officer, Rick Mahoney, was previously the CRO at Ansys, and brings a deep understanding of Ansys' go-to-market motion and its customer base and their needs. This combination is expected to increase our TAM by 1.5x to approximately $28 billion. We expect this combined TAM to grow at 11% annually through 2028, driven by the mega trends we discussed. Given the capabilities of the combined company, we expect to grow revenue faster than the TAM. The combined company's enhanced ability to invest in AI and cloud solutions, which underpins everything we do, is another huge benefit to this transaction. While we're leaders in leveraging AI and cloud solutions in our respective, respective fields, we think we've only just scratched the surface of what's possible. Through this combination, we will have a range of cutting-edge capabilities, including a highly talented workforce with deep engineering expertise, a R&D budget that's approximately 2 times the median of industry peers to unlock value for the full spectrum of customers, and cross-domain system data that covers in design to in field. With a common underlying technology and know-how, together, we'll also be able to more efficiently invest in these areas than either company can on its own today. This slide provides a high-level overview of the transaction structure. As you can see, Synopsys will acquire Ansys for $197 in cash and 0.345 shares of Synopsys common stock per share of Ansys. Following close of this transaction, Ansys shareholders will own approximately 16.5% of the combined business. We intend to fund the $19 billion of cash consideration through a combination of cash and debt, and have obtained $16 billion of fully committed financing. We are targeting to close in the first half of 2025, subject to customary closing conditions, including receipt of regulatory approvals. With that, I'll turn it over to Ajei. Thank you, Sassine. It is a pleasure to be with you and Shelagh this morning as we embark on an exciting new chapter for both of our companies. I share Sassine's enthusiasm for the combination of Ansys and Synopsys, and strongly believe that this transaction has the power to be transformative for our customers, our partners, and the entire industry. With that in mind, I'd like to take this opportunity to share some more information about who Ansys is today, and why I believe our business is well positioned to accelerate its momentum in the years to come. Ansys' mission is to power innovation that drives human advancement. Since our founding in 1970, we have worked alongside some of the world's most visionary companies, enabling businesses across industries to push the boundaries of product design by using the predictive power of simulation. As a leader in simulation and analysis, our business today is strong and growing. Supported by a highly diverse and recurring financial model, Ansys has a best-in-class product portfolio and thousands of customer relationships across diverse geographies and industries. Our deep strategic relationships with our customers have created a robust, recurring annuity, driving consistent top-line growth, industry-leading margins, and strong operating leverage. As you can see, we have strong recurring ACV of more than 80% and a track record of consistently delivering double-digit ACV growth. We are pleased to be entering this combination today from a position of strength. Additionally, today, we announced that our preliminary results indicate that our fourth quarter ACV is expected to exceed the high end of our guidance, which results in 13% ACV growth for 2023. Longer term, we're confident in exceeding market growth and delivering on a model of 12% constant currency ACV CAGR, and $3 billion of cumulative unlevered operating cash flows from 2022 to 2025. Simply put, we have a strong track record of delivering against a best-in-class financial model of double-digit growth with industry-leading margins and strong operating leverage. Our business is strong, and we believe that together with Synopsys, we will unlock new opportunities to further accelerate our success and deliver even greater value for our customers, partners, and shareholders. We also believe that this combination will open new opportunities for our employees. Both companies have world-class teams, and a larger company will deliver additional opportunities for those personnel to grow their careers. At Ansys, our talented team of over 6,000 employees is singularly focused on delivering cutting-edge simulation and analysis for our customers. For decades, we have continually invested in innovation to position Ansys as a partner of choice for customers... Global organizations understand that Ansys' expertise and deep and broad portfolio of multiphysics solutions can help them solve their key product and business challenges. And they increasingly rely on our team to address new product goals that include safety, price, functionality, reliability, and performance. By joining forces, Ansys and Synopsys will accelerate the development of our combined portfolio and deliver an increased level of innovation to market, which will also benefit the most traditional of Ansys customers. As we thought about Ansys' future, it was important to us that we pursue a path that would further accelerate our great progress, as well as maximize the value we deliver to our stakeholders. With that, I'd like to speak briefly about how we got to this transaction. Following a comprehensive and competitive process to determine the right path forward for Ansys, which was conducted with the assistance of independent legal and financial advisors, our board of directors unanimously agreed that the transaction with Synopsys was in the best interest of our company and our shareholders. As Sassine mentioned, we know Synopsys' business well and have deep respect for their team and our shared spirit of innovation. This transaction represents a premium of 29% over Ansys' closing price on December twenty-first, 2023, and a premium of 35% to Ansys' 60-day volume-weighted average price for the period ending on the same date. The cash and stock structure provides certain cash value to Ansys' shareholders, along with the opportunity to participate in the combined company's long-term growth potential. This transaction with Synopsys is a next natural step for our two companies. By merging our simulation and analysis solutions with Synopsys' EDA technology, we will create a stronger, more diversified product portfolio that is best positioned to meet the evolving needs of today's engineers. In this next chapter, we expect to amplify our impact. Together, Synopsys and Ansys will give engineers unprecedented insight into the performance of their products, from the behavior of semiconductor chips built using the latest 2-nanometer technology, to spacecraft operating millions of kilometers from Earth. In short, we're bringing together the best of both companies to drive new levels of customer innovation. This is an incredibly exciting proposition, which will benefit all our stakeholders. I want to extend my appreciation to my amazing colleagues for their dedication and commitment to Ansys and to our customers around the world. This transaction is a testament to the work they do every day. Thank you all for joining us as we embark on this journey to create a leader in silicon-to-systems design solutions. I'll now turn the call over to Shelagh. Shelagh? Thank you, Ajei. Let me provide the financial details. For fiscal year 2023, Synopsys and Ansys generated a combined $8 billion of revenue, and we expect the combined company to grow revenue at industry-leading double-digit rates annually for the near term, outpacing TAM. The transaction is expected to immediately expand margins, increasing Synopsys' non-GAAP operating margin by approximately 125 basis points for the first year post-close, and by approximately 250 basis points in the medium term. We also expect unlevered free cash flow margin to expand by approximately 75 basis points the first year post-close, and by approximately 250 basis points in the medium term. In addition, we expect to realize significant synergies, $400 million of identified and actionable run rate cost synergies by year three, $400 million of run rate revenue synergies by year four, growing to over $1 billion annually in the long term. We believe the transaction will be accretive to Non-GAAP EPS within the second full year post-close and substantially accretive thereafter. At transaction close, we expect our gross debt to adjusted EBITDA to be approximately 3.9x. Subsequently, we expect to generate substantial and sustained free cash flow, which will enable us to rapidly de-lever to less than 2x within two of the transaction close. Our long-term gross leverage target is below 1x, and we expect to maintain investment-grade credit rating, given our strong cash flow generation and commitment to rapidly de-lever. We intend to resume buyback as we approach our leverage target of below 2x. Let's take a closer look at the projected synergies. By year three, we expect to realize $400 million of run rate cost synergies through various initiatives. This is driven by streamlining and realizing the benefits of the greater scale and integrating engineering platforms and technology reuse for AI and cloud. By year four, we expect to realize $400 million of run rate revenue synergies from our combined silicon to systems customer base and our go-to-market strength, including integrated multiphysics systems analysis for advanced chip design, expansion of direct account coverage for Ansys portfolio in the semiconductor high-tech sector, and accelerated expansion in automotive, aerospace, and industrial equipment.... Over the longer term, these identified synergies are expected to grow to $1 billion annually. We believe our combined capabilities have the potential to unlock significantly more revenue synergies that are not included in these estimates, including further penetration beyond our existing verticals, as well as new joint innovative solutions. On to our combined company long-term financial objectives, which are multi-year. Our goal is to drive shareholder value by delivering annual industry-leading double-digit revenue growth, Non-GAAP operating margins in the mid-forties, unlevered free cash flow margins in the mid-thirties, and high teens Non-GAAP EPS growth. We intend to utilize our strong cash flow for debt paydown as our first priority, continue to invest in organic R&D, and as we approach our leverage target of below 2x, resume stock buyback. With that, I'll turn it back to Sassine. This is a transformational milestone, our biggest acquisition ever. And of course, a successful integration is critical to recognizing the full value of this combination. So our board and management team are keenly focused on solid integration execution. With our successful track record of strategic integrations and our strong existing partnership with Ansys, we're confident in our ability to seamlessly integrate our leading capabilities to meet customer demand. This is a transformational milestone for both companies, one that will enable us to capture the significant opportunities in front of us and solidify our position as a pioneer at the core of key technological innovation for years to come. Together, we will win in an evolving industry landscape and deliver even greater value to all our stakeholders. Operator, you may now open up the call for questions. Before we begin the question-and-answer session, I would like to ask everyone to please limit yourself to one question and one brief follow-up to allow us to accommodate all participants. If you have additional questions, please reenter the queue, and we'll take as many as time permits. As a reminder to all, to ask a question at this time, please press star one. Our first question will come from Harlan Sur with JP Morgan. Please go ahead. Morning, and congratulations on the announcement today. As you mentioned, if you look at the trends in the tech sector today, right? What we always say is great semiconductor companies are becoming more systems-focused, right? NVIDIA, AMD, Broadcom, right, just to name a few. So big users of Synopsys tools, but more and more Ansys solutions. And then on the flip side, systems companies, auto, industrial, aerospace and defense, cloud and hyperscale titans are opting to design their own chips. So big Ansys users today, but more and more EDA solutions. So on the revenue synergy side, the trends are already in place, but what percentage of Synopsys' customers use Ansys tools today? What percentage of Ansys customers use Synopsys solutions today, and where do you see these percentages moving over the next few years as the team unlocks revenue synergies? Thank you, Harlan, for the question. You captured it very well, and that's really the intention behind this combination. As you stated, more and more silicon companies are trying to design sophisticated silicon, and you can think of it as multi-die in a system, to serve for a specific system applications, and each system applications has their different requirements and needs. Those silicon complexity is driving the growth that we're seeing in our core EDA and IT business. And as you know, the multi-die system is where the partnership with Ansys started around 2017 timeframe, where we wanted to address the customer challenges around thermal, power, integrity, et cetera. And as you can imagine, in the last seven years, with more sophistication in those advanced packaging, that integration became more critical. As I mentioned in my prepared remarks, today, the majority of our Fusion Compiler customers that are designing those advanced multi-die systems are using Ansys as part of the Synopsys offering when we deliver to customers. So today, when we're selling Fusion Compiler, our sales team and our AEs are supporting and selling the RedHawk and other technology to integrate and deliver that solution to our customers. In terms of system companies designing silicon, of course, any system company designing silicon is a customer of Synopsys as well. Now, those system companies, they have more needs than just designing silicon. They're looking at the whole system, meaning the electronics, the electrical, the mechanical, the whole system. And this is where it's very attractive, the Ansys position that exists in those system companies. So again, as I mentioned in the prepared remarks, there is the silicon to systems and the system down to silicon combination that we're very excited about in this combination. ...Perfect. Thank you for that. And then Shelagh, on the $400 million in run rate cost synergies by year three, roughly how much of that is coming from COGS versus R&D versus SG&A? It will be a combination, Harlan. I mean, we will have enormous scale, obviously, as we bring these two companies together. Just as we've been driving over the last several years, as Sassine shared, obviously we've had a 7-point improvement in op margin. We're really going to drive that leverage and scale capability across both companies. We do see, you know, the ability to continue on that journey, which is why we're also setting our goal for operating margin in the mid-40s. Great. Thank you. Thank you. Our next question will come from Joe Vruwink with Baird. Please go ahead. Great. Thanks, everyone, and congrats to both your organizations. My first question, it, it does speak to revenue synergies as well, but when I think about the wallet share of R&D budgets that your two organizations see, you know, a chip company might spend 10% of R&D on EDA solutions. I think across the broader Ansys audience, they're maybe spending the equivalent of 1% on simulation. You know, there's still quite a bit of physical testing and prototyping out there. I guess my question is, where do you think these wallet shares go as customers pursue silicon to system strategies? And does a higher share of wallet get unlocked by joining your two companies together? Thank you, Joe, for the question. As you know, the R&D share of wallet is typically, or typically increases as complexity and need increases. In the EDA world, as you remember, not too long ago, about 8-10 years ago, it was around 10%. It's been increasing. Now, it's roughly around 13% or so, and the increase is due to complexity. I'll let Ajei comment regarding the system companies or in the traditional simulation and analysis companies, where the percentage is, but it's not in the one-ish or low single digit. It's actually in the mid to upper. But I'll let Ajei comment on the percentage of R&D for simulation and analysis. So, Joe, great question. I think you're making the point that there is a lot of opportunity for the expanded use of simulation within our customers, and you're absolutely right. It's obviously driven by a number of dynamics. Number one, when you consider the value of simulation, it really is about helping customers tame complexity. And as Hussein pointed out, as we're building these next-generation products that require multiphysics analysis, as we've discussed many times, that require an understanding of how silicon integrates with system analysis, all of that increases complexity. And with increased complexity comes the need for greater use of technology that allows customers to understand that complexity and to deliver next-generation products to market. So we are very excited, certainly, as you know, with the Ansys ability to continue to grow and address these emerging use cases with complexity. And of course, we're even more excited when you consider the combination of how by working together, the Synopsys Ansys portfolio will allow customers to take it even further to address the complexity that they're dealing with in the market. That's great. Thank you. And then a second question, I think one of the most frequent questions I've gotten from investors is just why a deal now, considering your two companies have worked together since 2017? I guess, how much is this a function of maybe purchasing paradigms, or strategically, how R&D managers are thinking about it, where this is a very real opportunity only now beginning to come up in terms of kind of a shared product roadmap that makes more sense to join you two, versus, you know, more in-house basic teams with an industrial customer? Is that, what would you kind of point to in terms of the timing logic? Sure, Joe. As I mentioned in the prepared remarks, around 2021 timeframe in our yearly strategic planning, we identified two areas of growth for Synopsys. One is systems, and the other one is the whole simulation area. And the reason for that is, back to Harlan's question, the trends in the market from silicon to systems has been happening for a number of years now, and that's accelerating our growth and customer need for sophisticated EDA and IP to design the silicon. But that silicon needs to be de-designed in the context of a system. You've been hearing us talk about the silicon to systems as well as the electronics digital twin. In other words, how do we create a model for these chips so system companies can run their simulation early, develop their software early? So with those trends, it became very apparent that co-optimizing between those multiple domains is a necessity and a problem that our customers are seeking help to solve in order to deliver to their product innovation. So we've been very deliberate, building on our partnership since 2017, and Ansys' strong position with these market verticals and their deep roots of product trust with our customers and future customers, made that decision fairly attractive and timely to pull the trigger right now. Thank you very much. Thank you, Joe. Thank you. Our next question will come from Jay Vleeschhouwer with Griffin Securities. Please go ahead. Jay, are you there? Yes, good morning. Sorry about that. Oh, there you go. Go ahead. Yeah, sorry. Perhaps as a clarification for all of us, when you refer to the revenue synergies, are you referring specifically to the cross-selling of integrated products? Let me just define that for us first. Then specifically, the $400 million you're talking about in year four would represent the equivalent of only 5% of today's combined revenue, so presumably a smaller percentage of your future revenue. So that would seem to be a relatively conservative contribution from the synergies as part of the forecast. Can you talk about what you're thinking is in that number? Then, as a follow-up, what do your forecasts anticipate vis-a-vis Ansys' revenue model, which is quite different from yours? They're still heavily reliant on perpetual and term licenses. Would you expect that over time you might convert more of their business to your, more subscriptions-oriented model? Sure. Let me take that question. Good morning, Jay. As we thought about revenue synergies, you're right, we took a very balanced view of line of sight revenue synergies. We know those are something that we're gonna look to continue to improve on over time, but we really took line of sight. And it's really based on looking at our deep understanding of both the technology and the customer base. As Sassine mentioned, we already have had partnerships with Ansys from 2017. So, the synergies in the $400 million are driven by selling integrated multi-physics analysis for the advanced chips. Some of the solutions that Sassine was talking about in terms of supporting our customers on multi-die. It's also expanding account coverage into the Ansys portfolio, for semiconductor and high tech, and then further acceleration of our products on the Synopsys side in automotive, aerospace, and industrial, which is, those last two being more cross-selling, as you're talking about. And as we're thinking about growing those capabilities over time, they obviously, over time, will get infused with new innovative product that we'll be able to jointly, produce, which is why our long-term goal on that $400 million synergies, once we've got that to fruition, is closer to a $1 billion. In terms of the model, obviously, the, you know, Ansys technology, is infused across, many, many customers. We intend to, you know, continue that broad diffusion and look for broader diffusion of our EDA and IP as more customers, systems customers move to wanting to either architect or design silicon. And then in terms of the change in business model, we're not anticipating a change in the business model between the two companies. We have... They've been moving into a subscription business model. I might have Ajei comment on that. Over the last several years, they've moved quite a bit of business into a recurring model, and we anticipate continuing to drive forward on that. Ajei, do you want to make a comment? Sure. Jay, as you know, about, you know, 82% of our ACV comes from recurring sources, and that obviously reflects the strong relationships, and the strong technology penetration that we have within our customer base. Thank you. Thank you. Our next question will come from Vivek Arya with Bank of America Securities. Please go ahead. Thanks for taking my questions. I have two as well. So first, on China approval, will it be required? And just what are the dynamics, given some of the recent restrictions on Ansys, but Synopsys are having a strong presence in China. So I'm just curious, Sassine, what is your read on whether the China approval will be required, and how long could it take? And will it require any kind of divestitures or other assurances that need to be made either to China or to U.S. regulators? Hey, thank you, Vivek, for the question. As you can imagine, we did not jump into this combination without a clear expectation that the regulatory review will be manageable. We were fairly well advised and prepared throughout the discussion around this transaction. And we both are very committed to closing this deal. Now, regarding specifically China, I really don't want to speculate at this point regarding the process, but the one thing we'll assure you and our shareholders is our commitment to do everything possible to close this deal. And on the Ansys, and I'll have Ajei comment as well, regarding some of the restrictions. Now, as you know, the vast majority of Ansys products are not subject to the U.S. export licensing requirements. We've had number of discussions with Ansys, and we feel very comfortable with their not only commitment to comply, but their guardrails that they have in place in order to comply with the export control. Ajei? Yeah, thank you, Sassine. And as we said in our Q3 earnings call, we have put in place some additional incremental approval processes on sales of certain Ansys products and services to entities that are performing R&D or certain controlled activities in China. And we've internally adjusted our business operations to take into account these new vetting requirements. And that result is really a little bit of an increase in the time that it takes us to process transactions for certain prospects that are located in China. And of course, despite these developments, as you know, our business is performing well. And as I mentioned on the call, we gave you an early insight into our Q4 results. Got it. And for my follow-up, maybe one for Shelagh on the cost synergy side. When I look at Ansys operating margins, they're already doing 41%-42% margins, so you know, quite, quite at a premium level. So I'm curious, what are the areas of cost synergies? Because I imagine, you know, you guys are investing significantly in AI. They are already running a very lean model, and when you combine, then there will be greater need for investment in areas to produce revenue synergy. So what are really the areas of cost synergy? And kind of part B of that, Shelagh, is what are you assuming for the divestiture of SIG in this process? How does that factor in, in terms of, either your cost structure and just, you know, what you can generate to help defray the cost of making this acquisition? Thank you. Yeah, sure. So, as we looked at cost synergy, there's certainly infrastructure costs that we are... And again, independently, we were already driving significant improvement in modernization of our infrastructure costs, and you can think about things in G&A infrastructure areas. And certainly as we scale to this much larger revenue footprint, our ability to drive more leverage in what you would call kind of core, core functions inside the company, are gonna be even broader. And so, we'll look across really all of those things that aren't customer-facing to drive further synergies, which is what we've been driving as a company. Then in terms of how we think about kind of the model going forward, that's why we committed not only to the $400 million in synergies but really to operating margin in the mid-40%. So it's, it's an ongoing commitment to continue to drive greater and greater leverage as we go forward. Anything on SIG, Shelagh? Oh. Any- Oh, sorry. Yeah. So, as we said in the prepared remarks, we are in process to be able to fund the $19 billion with $16 billion in debt. We are deeply engaged in the SIG process. As we announced in our Q4 earnings, we're working through a strategic review process on that. We look forward to updating you on that process, as we continue to make progress on that. Thank you. Thank you. Our next question will come from Jason Celino with KeyBanc Capital Markets. Please go ahead. Great. Thanks for taking my questions. You know, from an execution standpoint, you know, this is the biggest transaction that Synopsys has ever done. I think you mentioned that Rick Mahoney, who has considerable experience at Ansys, you know, is now CRO. Can you maybe speak to what role he may play and that integration team that you talked about in the prepared remarks, thanks? Yeah. Thank you, Jason. Actually, you're right. While this is one of the largest transactions we've made, at the same time, it's with a company we're so familiar with. We started that relationship, as I mentioned, in 2017, and it started as an R&D to R&D relationship. When you engage with a company to integrate many aspects of their product into a solution, you can imagine the interaction between the two teams. So from an R&D point of view, culture standpoint, engagement standpoint, we are not only familiar, we engage in a very positive way and has been very successful for the last seven years. The other part of any successful integration is how do you go to market? Do you know the customers? Do you know their their buying and purchasing motion, et cetera? Rick Mahoney was at Ansys for five years. If I'm not mistaken, he joined around the same time that Ajei took over the CEO role of Ansys, and together, they built the go-to-market expansion inside Ansys. Having him here at Synopsys for the past year and a half is a great not only insight regarding the customer base, the sales motion, et cetera, will be key in the integration process to ensure that we won't miss a beat in engaging customers and successful delivery on our revenue and competitive position with our customers. So again, you're right, it's a large M&A, but we have deep R&D relationship. It's existing for the last seven years and a very good understanding of the go-to-market. Perfect. No, that's a good clarification. And then one quick one on the $400 million in revenue synergies. You know, does that assume Ansys continues to grow at 10%, as outlined in the PowerPoint? Thanks. Let me answer it this way, because I know as Shelagh gave already the view of how did we derive the $400 million. I want to step back and look at the overall TAM over the next five years growth of 11%, and our commitment to exceed and grow above that TAM. So that tells you that what we're focused on is delivering differentiated solution to our customer to expand beyond the TAM's, the TAM's growth. The $400 million and the midterm to a billion-dollar long-term opportunity we see. Okay, great. Thank you. Thank you, Jason. Thank you. Our next question will come from Gary Mobley with Wells Fargo Securities. Please go ahead. Good morning, everybody. Thanks for taking my question, and congratulations to both parties on the transaction. Ajei, you mentioned, I guess in the prepared remarks and the press release, some upside to the annual contract value for Ansys. Maybe you can just speak to what's driving that upside. Is it more of a more buoyancy in, in the macro, or is it something more idiosyncratic to, to Ansys? So as I said, you know, we gave you a preliminary view into the Q4 results. We haven't actually announced our fiscal year 2023 and Q4 results. But as I mentioned on the call, our ACV came in above the high end of our guidance, and we grew about 13% for the full fiscal year from an ACV perspective. Okay. Obviously, we'll be in a position to share more details. Yeah, we'll be in a position to share more details when we formally announce our results. Thank you, Ajei. As a follow-up, I wanted to ask about, another dynamic to the capital allocation strategy. It makes sense that you would halt your buyback given the increased leverage, but, you know, Synopsys has built a world-class EDA and IP franchise on the idea that you can roll in maybe six tuck-in acquisitions each year, each with a market value of maybe $50 million-$100 million. Should we also assume that, you'll slow the pace of those tuck-in acquisitions as well until the leverage is brought down? Yeah. Our priority with the strong cash flow generation will be to drive the deleverage, and we're very committed to have the deleverage happen within the first 24 months to be less than 2x. And then our expectation is that we would then be able to resume buyback. And as you said, you know, over time, once we've driven our continued deleverage, we would look at tuck-in acquisitions. But we are going to be fully focused on bringing these two teams together to make sure that we're setting everything up for success and driving that deleverage to be able to have the opportunity to continue to invest in the business. Thank you, Shelagh. Thanks, Gary. Thank you. Our next question will come from Ruben Roy with Stifel. Please go ahead. Thank you. Thanks for letting me ask two questions here. First question for Sassine. Is there a high-level way of thinking about the revenue that's available for synergies, meaning how much of Ansys revenues are actually going into the semiconductor or semiconductor systems space versus I think Shelagh characterized longer-term revenue from synergies that's coming from beyond semiconductor or high-tech sectors. So just trying to understand what portion of that revenue is available for synergies, you know, sort of more in the near to medium term. Yes. Thank you, Ruben, for the question. As I mentioned, in the prepared remark and the earlier question, currently in our design automation solution, we integrate a part of Ansys solution and with Fusion Compilers in particular for advanced nodes and the more sophisticated chips, we're already integrating and selling that product. So as we look at the complexity and the proliferation of advanced silicon for AI application, be it in data center, automotive, et cetera, all of these solutions require that sophisticated integration. So that's an opportunity for continued growth. So the one plus one will be greater than two. Meaning, if we're selling for X dollar our Fusion Compiler and Y for the Ansys technology, given, one, the growth in the market opportunity due to what I just mentioned-... and the complexity, it gives us an opportunity that we're not just selling X plus Y, there will be layers of value that we can add. And we've been very successful doing it. As you know, with our DSO.ai or many new technology that we introduce, we're able to incrementally engage customers not at the time of contract renewal, but as they wanna use that technology to increase our revenue with those customers. Now, you look at, and I wanna go back to that silicon, what I just described, to systems. Those system companies are looking for a way to integrate across physics, let's call it, from what they're doing on the mechanical, on the electrical to electronics. And that gives an opportunity to both portfolio. Remember, we've talked about many times about the, the solution Synopsys has to model the electronics of a system. But the electronics of a system needs to be modeled in the context of what Ansys products provide in electrical, mechanical, et cetera. And that's another opportunity that we're taking into account as part of the, the mid to long-term, revenue synergy opportunity that we see. Got it. Thank you very much, Sassine, for that detailed answer. I think we're running out of time here, but if I could squeeze in a quick follow-up. You mentioned some. I'm sorry? No, go ahead, Ruben. Okay, thank you. I just thought you mentioned, Sassine, on the prepared remarks something about cross-domain data. I found that interesting, just given that, you know, a lot of the things that you're doing around AI, it seems like your data set is one of the unique aspects of, you know, how you can modify the AI longer term. So I'm wondering if you just can maybe expand on that cross-domain data comment. You said it combines in design and field, you know, sort of data that you're accumulating, you know, from the relationship with Ansys. And so, you know, how do you see that playing out, you know, in terms of AI opportunity longer term, I guess, would be the question. Thank you. Yeah, that's an awesome question, Ruben, and I'll, I look forward to the Investor Day to give you as much details as you're looking for. But meanwhile, what we've done with Synopsys.ai, the reason we expanded from DSO, VSO, TSO, et cetera, to a bigger umbrella, and if you remember, we announced the data continuum with it, is the insights that you can get from multiple domain and stages of the design. And can you optimize the whole system as you're looking at those siloed data and bring it together as a continuum? And once you have that insight, can you use AI to either optimize or go a little bit further than optimization to make decisions? We've talked about it in Q4, that as we're going from optimization to generative to autonomy, what are the opportunities that you can have across domain? We look at it from in design to in field, the opportunity as we're looking from silicon to systems, because when you're doing the design, there are many opportunities to optimize. Once that silicon is sitting in the system, in field, what are the opportunity to get insights and data and go back and close the loop to optimize future product, et cetera? As you can see, I'm passionate about this point, and I look forward to having deeper conversation around it. Thanks. Thank you, Seem. Thank you, Ruben. Thanks, Ruben. So operator, that's gonna be the last question. We're very excited. Thanks for joining us today. We look forward to talking to you about the significant long-term value this is gonna create in the coming weeks, and we look forward to seeing you in our investor meeting in March. Operator, please close out the call. Thank you, everyone. Thank you. This does conclude today's call. We thank you for your participation. You may disconnect at any time.