Thank you, Livia. I would like to welcome everyone to our first quarter 2021 earnings conference call. I am joined today by Lip-Bu Tan, Chief Executive Officer, Anirudh Devgan, President, and John Wall, Senior Vice President and Chief Financial Officer. A webcast of this call is available through our website, cadence.com, and will be archived through June 18, 2021. A copy of today's prepared remarks will also be available on our website at the conclusion of the call today. Please note that the discussion today will contain forward-looking statements. Forward-looking statements include, but are not limited to, statements about our business outlook, product development, business strategy and plans, industry and regulatory trends, market size, opportunities, and positioning. These statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those projected or implied in today's discussion. For information on factors that could cause a difference in our results, please refer to our filings with the Securities and Exchange Commission. These include Cadence's most recent reports on Form 10-K and Form 10-Q, which was just filed, and then also including the company's future filings and the cautionary comments regarding forward-looking statements in the earnings press release that was issued today. You should not rely on our forward-looking statements as predictions of future events. All forward-looking statements we make on this call are based on estimates and information available to us at the time of this discussion, and Cadence disclaims any obligation to update any forward-looking statements, except as required by law. In addition to financial results prepared in accordance with generally accepted accounting principles, or GAAP, we will also present certain non-GAAP financial measures today. Cadence management believes that in addition to using GAAP results in evaluating our business, it can also be useful to review results using certain non-GAAP financial measures. These non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. These non-GAAP financial measures are not based on any standardized methodology prescribed by GAAP and are not necessarily comparable to similarly titled measures presented by other companies. Investors and potential investors are encouraged to review the reconciliation of non-GAAP financial measures with their most direct comparable GAAP financial results. A reconciliation between each non-GAAP financial measure and its nearest GAAP equivalent may be found in our earnings press release following the financial statements. Copies of today's press release, dated April 26, 2021, for the quarter and year ended April 3rd, 2021, related financial tables, and the CFO commentary are also available on our website. For the Q&A session today, we would ask that you observe a limit of one question and one follow-up. You may re-queue if you would like to ask additional questions and time permits. Now I will turn the call over to Lip-Bu Tan. Good afternoon, everyone, and thank you for joining us today. I'm pleased to report that Cadence had a great start to the year, delivering outstanding financial results for the first quarter, with broad-based demand for our innovative solutions, driving strong revenue growth, profitability, and cash flow. John will provide the details in a moment, as well as our updated outlook. Generation trends like 5G, hyperscale computing, autonomous driving, and industrial IoT continue to propel the need for innovation in compute, memory, networking, and storage from the edge to the cloud. With massive amounts of new data being generated every day, AI, ML, and data analytics are helping transforming the data to intelligence, providing actionable insights, and accelerating digital transformation of several industry. These trends are continuing to drive strong semiconductor demand and design activity across a broad spectrum of end markets. Our Intelligent System Design strategy ideally positions us to capture these exciting opportunities. Now let me talk about the Q1 highlights. Starting off with core EDA and IP in the design excellence layer of our ISD strategy. We had ongoing strength in aerospace and defense, and we significantly expanded our collaboration with a marquee aerospace defense systems company. That included the proliferation of our digital full flow, as well as our functional and custom simulation solutions. Our digital sign-off business had a strong revenue quarter, with multiple market- shaping customers successfully taping out at 5 nm and below process nodes using our digital full flow. Increasing design complexity continues driving a secular trend for hardware-assisted verification. Q1 was a standout quarter for our Palladium simulation and Protium prototyping platforms. Significant expansions, as well as multiple new wins, contributed to Q1 being our best hardware revenue quarter ever. Additionally, we announced our new Palladium Z2 and Protium X2 platforms, delivering 2x capacity and 1.5x higher performance than our current leading Palladium Z1 and Protium X1 systems. These next generation systems enable the highest throughput hardware debug and pre-silicon software validation for multi-billion gate SoC designs and were endorsed by NVIDIA, AMD, and Arm. Our IP business also delivered double-digit year-over-year revenue growth. There was strong demand for our high-speed SerDes IP by market-shipping customers for their next generation data center and networking environments, as well as continual strength in our memory interface IP business. Tensilica continued to expand its footprint in true wireless stereo and Bluetooth headsets. Our Vision P6 and HiFi products proliferated in the wearable and smart speakers end markets. It was another exciting quarter for system design and analysis segment, delivering over 30% year-over-year revenue growth. Early this month, we acquired Pointwise, a leader in mesh generation for computational fluid dynamics. The addition of Pointwise technologies and experienced teams further broaden our system analysis portfolio, complements our recent acquired NUMECA CFD technology and our organic multi-physics products. Pointwise provides highly innovative mesh and grid generation technology to enable high-fidelity CFD analysis. Their solutions are being used by several marquee customers, especially in the aerospace segment. We want to congratulate our NUMECA team for the role their product played in the design of the Emirates Team New Zealand racing boat that won America's Cup for New Zealand for the fourth. The winning team used a simulator based on the NUMECA FINE/Marine CFD software for their computational fluid dynamic modeling. Thanks to the unprecedented accuracy and realism of their simulators, we're about to accurately test new ideas and concepts long before first boat ever touched the water. We introduced Sigrity X, our next-generation signal and power integrity solution, with endorsements from Samsung, MediaTek and Renesas. This solution leverages new simulation engines and massively parallel architecture to deliver up to 10% performance and capacity gain for system-level simulation of the most demanding hyperscaler, 5G, automotive, and aerospace applications. Qualcomm expanded their usage of our flagship Virtuoso Studio RF and AWR Design Environment products for advanced RFIC design and Clarity 3D for system analysis. Let me conclude with a few comments on some macro-level topics. We continue to monitor the semiconductor supply chain situation. So far, we are not seeing any slowdown in design activity across our customer base. Next, regarding the evolving state of the COVID-19 pandemic. While some countries are edging towards normalcy, there is a growing concern with the escalating number of cases in certain regions, especially in India. As always, the health and safety of our employees, customers, and partners is paramount, and we will continue doing what is in their best interest while working closely with local regulatory agencies. Lastly, in the past year has brought to light many social justice challenges, including recent acts of violence against Asian Americans. I strongly believe that we have an obligation as individuals and as a company to take a stand against racism and set an example for inclusiveness and understanding. At Cadence, we are committed to listening with empathy, be inclusive of different points of view, and as a result, ensure that our diversity enhance our experience and our innovative spirit. Now I will turn it over to John to go over the Q1 results and present our Q2 and updated 2021 outlook. Thanks, Lip-Bu Tan. Good afternoon, everyone. I'm pleased to report that we exceeded all of our key operating metrics for the quarter. Broad-based growth across many lines of our business, combined with some earlier than anticipated hardware sales, resulted in strong revenue growth in Q1. We continue to invest heavily in building out a multi-physics platform for system design and analysis. We completed our second acquisition of the year in the CFD space, where we acquired Pointwise in April, a leader in CFD mesh generation. The focus over the past few months on completing acquisitions contributed to some delays to our expected pace of hiring in Q1, but we expect to get hiring back on track by the second half of the year. Now let's go through the key results for the first quarter, beginning with the P&L. Total revenue was $736 million. Non-GAAP operating margin was approximately 38%. GAAP EPS was $0.67, and non-GAAP EPS was $0.83. Next, turning to the balance sheet and cash flow. At quarter end, cash total $743 million, while the principal value of debt outstanding was $350 million. Operating cash flow for Q1 was $208 million. DSOs were 48 days, and during Q1, we repurchased $172 million of Cadence shares. Before I provide our updated outlook for fiscal 2021 and what we expect for Q2, I'd like to take a moment to share the assumptions embedded in our outlook. The ongoing chip capacity constraints, along with the recent surge in COVID-19 cases in India, are expected to create a headwind for IP revenue for the remainder of this year. The revenue impact has been factored into our outlook. We expect expenses to increase in the second half of the year, primarily due to headcount growth as we continue to invest in our expanding multi-physics platform. We've included the Pointwise acquisition in our 2021 outlook. Finally, our outlook assumes that the export limitations that exist today for certain customers will remain in place for all of 2021. Embedding these assumptions into our outlook for fiscal 2021, we expect revenue in the range of $2.88 billion-$2.93 billion. non-GAAP operating margin in the range of 35%-36%. GAAP EPS in the range of $2.01-$2.09. non-GAAP EPS in the range of $2.99-$3.07. Operating cash flow in the range of $900 million-$950 million. We expect to use at least 50% of our free cash flow to repurchase Cadence shares in 2021. For Q2 2021, we expect revenue in the range of $705 million-$725 million. Non-GAAP operating margin of approximately 36%. GAAP EPS in the range of $0.44-$0.48, and non-GAAP EPS in the range of $0.74-$0.78. Our CFO commentary, which is available on our website, includes our outlook for additional items as well as further analysis and GAAP to non-GAAP reconciliations. In conclusion, the Cadence team delivered another quarter of strong operating results and remain focused on driving profitable revenue growth. We'd like to thank our customers, partners, and of course, our employees, for a solid start to 2021. I'd like to remind them all that their health and safety continues to be our first priority. With that, operator, we'll now take questions. Thank you. At this time I would like to remind everyone who want to ask a question to please press star the number one on your telephone keypad. Please limit yourself to one question and one follow-up. We will pause for a moment to compile the Q&A roster. Our first question comes from Jason Celino with KeyBanc Capital Markets. Hey, guys. Thanks for taking my questions. Maybe my first one. Historically, customers have gravitated toward the latest and greatest hardware products, especially on the emulation side. Because emulation strength has been going on strong for several years now, how do you think the pace of uptake for the Palladium Z2 and Protium products could be? Thanks for the question. Yeah, that's a great question, Jason. You might have noticed that we beat the midpoint of guidance in Q1. Partly that was due to us trying to manage the Osborne effect on transitioning to our new Palladium Z2 and prototyping Protium X2 system. We had an incentive plan in place to try and sell as many of the Palladium Z1s and Protium X1s before we launched the new products. We expect strong uptick for those new products. The incentive plan worked really well, and Q1 was a really strong hardware quarter for us. It's a testament to the compelling value of our hardware solutions that are providing both chip and system-level customers across multiple use models. Okay, great. For my follow-up, maybe just an explanation here, I think, John, you mentioned the chip capacity constraints and the COVID impact in India being a headwind for IP. Yes. Maybe coming from my software background, but maybe explain why this would be an impact, and maybe you could quantify the dollar amount or the percentage? Yeah, sure, Jason. On the COVID-19, the worsening pandemic in India could have some impact to the timing of delivery for certain hardened IPs that require testing in labs. As we said in our prepared remarks, that's been factored into our updated outlook. India bailed us out last year. If you recall, we had similar challenges back in Q2 last year in North America, we're hoping we can do the same for them now, it could cause some fluctuation in revenue timing between quarters. The bigger impact on the year is probably in relation to chip capacity constraints. Last quarter, when we talked about that, my expectation was royalties might be flat year-over-year. I now expect them to be slightly down. There's a slight headwind built into the guide this quarter for that. Great, thank you. I'll get back in queue. Okay. Our next question comes from Jackson Ader with JPMorgan. Thanks for taking my questions, guys. I'd like to start on remaining performance or backlog and calculated bookings. Down a bunch in the quarter relative to a pretty tough compare. I was just wondering if you guys had any additional commentary on the bookings performance in the quarter. Hi, this is John. I think that's just a reflection of a low renewals quarter. Yeah, we'd expect the remaining performance obligations to ratchet back up before the end of the year. Okay, fair enough. On the geographic side, we saw remarkable growth from China in the second half of 2020. Looks like that geo kind of came back down to earth here in the first quarter. Any particular product segments, hardware, software, IP, that would be impacted for that geography coming back down? Yeah. China's back, coming clearly back to more normal levels of business at the 12% levels. That's mainly because the strength appears to be more broad-based across geographies this year. If you recall, in Q3, we had a really strong hardware quarter, and that was in China. This quarter, in Q1, a lot of the strength was in North America and more balanced across all the regions, across all the geographies. In our outlook, I've assumed a return to our usual recurring revenue mix in the region as well. That, along with the fact that we have one less week in the second half of fiscal 2021, kind of contributes to the conservative revenue outlook in the second half. When we get to the summer, we'll have increased visibility into revenue for the second half and the pipeline for the second half, and we can update the outlook then at that time. Okay. All right, thank you. Our next question coming from the line of Gal Munda with Berenberg. Your line is open. Hi, thank you for taking my question. The first one is just, John, maybe a little bit expanding on what you just said. When I look at your historical trends of revenue, they tend to be fairly well, kind of equally split throughout the quarters, and Q2 tends to be sequentially slightly stronger than Q1. Is it because of this slight pull forward of hardware that you're expecting Q2 potentially at the mid end of the guidance be materially lower this year? Yes, Gal. We incentivized the sales force to try and close some Palladium Z1 and Protium X1 business as early as possible in the year in preparation for the launch of our new Palladium Z2 and Protium X2 hardware systems. About $10 million of Q1's revenue I had originally forecast to happen in Q2. Of the $16 million beat, I guess at the midpoint for Q1, there's probably $6 million of that was a true beat, and $10 million was what we originally thought would fall into Q2 that happened a little bit earlier in Q1. Got you. That's really helpful. Thank you. Maybe just a little bit of a longer-term strategic question around building the CFD platform capabilities, which kind of adds to your Clarity side. Thinking about potentially other physics that you might be adding over time. Is there a potential for that, or do you guys think that fluid simulation is something that's kind of very applicable to the cooling and everything of the system, so because of that, you kind of want to bring that in-house and the other ones maybe you partner? How are you thinking about it? Yeah, that's it. Thank you for the question. Let me answer that. This is Anirudh. First of all, we are excited about CFD, like we mentioned last time, and it is a very big segment in system analysis, close to $1.5 billion, $1.6 billion. We are excited, focused on that. Pointwise is a leader in meshing technology, so we are glad to work with them and bring them in-house. We think combining Pointwise with the NUMECA solver and our organic capability in parallel and distributed computing can give a very state-of-the-art solution for the CFD market. Okay. We want to make sure we do well in CFD, and as you know, we are already in electromagnetics with Clarity and thermal with Celsius. I think these are our focus areas for now, and then we see how things go in these segments. So far, we are optimistic. Actually, if you look at Q1 results, we had good growth versus Q1 of last year. Like John said, we are continuing to invest in this space and we are still early in CFD, but optimistic about it. Got you. Thank you. That's really helpful. Our next question coming from the line of Joe Vruwink with Baird. Great. Hi, everyone. I was hoping just to talk about the product cycle for the new emulation and prototyping. To get two platforms launching at the same time that have new silicon behind each, I think that's a pretty unique event. John, I get kind of the timing and the incentivizing of the older generation, but could it be possible that just the performance on the new generation means that the net demand ultimately is maybe higher than being forecasted? Do you think that's a possibility, but maybe timing-wise, it's probably more of a second half driver for you? Yeah, I think that's a good observation, Joe. We're building the systems as quickly as we can. There's plenty of demand there. We dubbed the systems the dynamic duo for the tight integration with unified compiler and interfaces. The Palladium Z2 and Protium X2 systems are designed to address the challenges faced by those designing for the most advanced electronic applications, including mobile consumer and hyperscale computing design. We expect demand to be very strong. The customers can achieve up to two times capacity and one and a half times performance improvements with each platform. They work so well together. Like I say, the team call them the dynamic duo, so it was important for us to launch them together. Yeah, we're building them as quickly as we can, and there's plenty of demand for them. Like I say, by the time we have them built and everything, it might impact the second half of the year more than the first. Okay. That's helpful. Just to follow up on the margin guidance for the year, because I think you ended up beating your forecast in 1 Q by $28 million, and the full year moved higher by $12 million or $13 million. Is that purely just a function of hiring being back half weighted, or are there other things like product mix or some other investments to consider as well? No, that's exactly right, Joe. It's basically what you're seeing is the compounded effect of revenue happening a little bit earlier than originally forecast because of the success of that incentive program, and the success of the sales of Palladium Z1 and Protium X1 in Q1. Hiring getting delayed a little bit to later in the year as we focused on closing some acquisitions for the CFD space. Great. Thank you very much. No worries. Our next question coming from the line of Jay Vleeschhouwer with Griffin Securities. Your line is open. Yeah. Thank you. Good evening. A couple of paired technical and financial questions for Anirudh and for John. First, for Anirudh, on the fourth quarter call three months ago, as you may recall, we talked about how customers' design flows and methodologies are evolving. The follow-up therefore to that observation you made at the time is, how might that affect, as that takes place, Cadence's pricing and/or product packaging commensurate with customers' evolution of their methodologies? Could there be any effect on how you price and/or package your software or anything else? Secondly, with respect to system design strategy and the overall computational software strategy, how would you compare the R&D and AE intensity or requirements of system analysis, particularly as you add more in CFD and other physics, versus core or classical EDA, such as synthesis, implementation, RTL simulation and the like? Do you expect any meaningful differences between those two parts of the business? Thanks. Thanks, Jay, for the question. Those are very good questions. Let me take the second one first. As you may know, Jay, even in our EDA business or EDA software business, maybe one-fourth of it is more simulation-based, like circuit simulation and logic simulation. Invariably those simulation-based businesses are more profitable than overall EDA. Like Spectre X Simulator usually is more profitable than place and route, for example. I expect a similar trend to happen in system analysis. System analysis by nature is simulation-based, whether it's Clarity, it's electromagnetics or CFD. In steady state, I do expect that system analysis to be more profitable than core EDA. As we build up and we scale revenue, there are some transient natures, but in steady state, I do expect that to be the case. So far, we are pleased with not just the revenue growth, but actually even the margin performance of system analysis business. On your first question, I think we are looking at it carefully, in terms of packaging and pricing. We are pretty disciplined in that. I think one big trend, like I mentioned last time, there's more and more full flow used at lower nodes as you know already. We are selling a lot of these tools together. We just continue to monitor it and work discipline with our customers and internal teams. John, do you want to add anything on pricing? Yeah. Well, what I would add is that, Jay, you're exactly right. You look at the tools that we create on the software side, there's a lot of R&D and AE intensity in terms of supporting those tools. If you look at the software that we're selling, you could nearly bifurcate all the licenses into two groups. There's the interactive tools, where every license needs a driver, and then there's simulation tools where they're kind of batch process tools, where one engineer can kick off 1,000 simulations if they want. That's partly why the system analysis part of the business or the simulation part of the business is the most profitable part of our software business. In all cases, our expenses are generally tethered to the R&D and AE engineers required to support the software. The revenue is not tethered in relation to simulation. It's not tethered to the number of engineers in simulation licenses. I think that's why we see that being more profitable. Understood. Thanks very much. Our next question coming from the line of Gary Mobley with Wells Fargo. Your line is open. Hey, everyone. Good afternoon. Thanks for taking my question. I wanted to ask about the newest round of export restrictions from the U.S. Department of Commerce targeting China and about half a dozen supercomputer companies. I realize not all those are specifically focusing on developing processors, but presumably, a handful of those companies are Cadence customers. With respect to those specific customers or any other export restrictions, what way has that impacted your ability to do business in China? Yeah, this is Lip-Bu Tan. Let me just have a answer that first, and then John or Anirudh Devgan can add on to it. First of all, clearly we have and will continue to comply with all the export control regulations, including the military end user and the entity list that you mentioned. Clearly we are not going to comment on certain specific companies, but everything we know we already built into our guidance. Okay. John, can you confirm that roughly $190 million as reported in your cash flow statement was the amount paid for NUMECA in the first quarter, and how much you would expect from both Pointwise and NUMECA as a contributor to 2021? Hi, Gary. Nice try. We're not disclosing those separately. We're very pleased with both acquisitions and delighted to have them as part of the Cadence family. All right. Thank you, guys. Our next question coming from the line of John Pitzer with Credit Suisse. Your line is open. Yeah, good afternoon, guys. Thanks for letting me ask the question. John, I just want to go back to your commentary about some of the headwinds that you see this year. I think I understand the COVID India issue. I'm still a little bit confused by the royalty, because even though we're in a very tight chip capacity market, unit volumes and revenue should be up pretty significantly year-over-year for the industry. Can you help me better understand what's causing the royalty kind of the headwind in kind of your volume-based businesses? Yeah. John, good question. Last quarter, for the year, I thought we'd be flat because of unit volumes. We weren't expecting any improvement in unit volumes. In fact, in Q1, I think our royalty revenue for Q1 was flat on Q1 2020. The forecast looking out over the next three quarters, and my team goes through a detailed analysis. It depends on, I guess, the mix of customers that we have and the unit volumes that they have. Their forecast suggests that we'll be slightly down now, and that headwind's being built into our forecast. I don't mean that to be a commentary on the entire industry, it's just in relation to the customers that we generate royalty revenue from. We expect their unit volume to be down. Is there any way to characterize sort of end market that those customers play into, or is that a level of detail you're not willing to give? No, we can't give that. Sorry. No, that's helpful. As my follow-up, maybe another way to ask sort of Gary's question about restrictions. I'm just kind of curious, when you think about the full year guide, what's embedded for China? I'm clearly asking because while I understand sort of the geographic mix broadened out in the current quarter, China was down significantly, and there are some investor concerns that maybe the back half of last year represented a pull forward. As you think about the full year guide, is there any sort of broad strokes you can give us on how you feel like China's going to trend for the rest of the year within that guide? Yeah, John, I backed into the guide for China basically expecting us to mean revert back to our normal mix of business between upfront and recurring revenue. In the second half of last year, we had more upfront revenue than average, and particularly in China. I wasn't happy to extrapolate that for all of 2021, because I felt that the second half looked like an anomaly. I thought for guidance purposes and to be conservative, we would assume that we mean revert back to our normal recurring revenue mix right in the middle of that 85%-90% range that we normally have for the company, even though China is probably slightly more upfront than that. My expectation then is that China is pretty hard to predict, but somewhere in the 12%-13% range for revenue, and that's where it came out for Q1. That's what we've embedded into the guide. We'll have better visibility once we get to the middle of the year, and we'll update then. We're kind of assuming we revert back to mean, and I thought that was the best way to de-risk the year for China. Perfect. Very helpful. Thank you, John. Okay. Our next question coming from the line of Tom Diffely with D.A. Davidson. Yeah. Thank you and good afternoon. Maybe, John, just one more question on the really strong quarter for hardware. Did the incentives impact your margins at all in the quarter in any meaningful way? I would say it did naturally. The extra revenue would have boosted margins in Q1 at the expense of Q2. That would only be a shift between one quarter and the other. The delay in hiring would have benefited Q1 and also benefited the year. We expect to catch up with the hiring, of course, because we didn't hire in Q1 as quickly as we thought, those savings are both in Q1 and the year. I was wondering more if the incentives included discounts, so the pricing went down in the first quarter. Oh, sorry. Let me clarify. The incentives I was talking about were more sales incentives for our sales team. Okay. Not incentives for customers. All right. A longer-term question for maybe Anirudh Devgan or Lip-Bu Tan. When you look at the node transitions in the industry and whether it goes between every two years or every three years, how impactful is that duration between nodes for you if the underlying demand is still strong? I can start first, and then Anirudh can chip in. Clearly, I think the complexity and the dynamic of the demand is very strong on that 5G. We are excited. We don't see any slowdown on the design. Now, in terms of process node migrations, clearly I'm marching forward down to five in production and three in design, who is engaging right now. Clearly, there's a lot of demand on that. We are very heavily investing in that because every node is a new opportunity for us, and we are very excited about it. In terms of the technology and process, maybe Anirudh can update you where we are. Yeah. Thank you, Lip-Bu Tan. I just want to add that one exciting thing is not only I believe the node transitions are continuing. In terms of R&D, we are mostly working on 2 nm now. 3 nm is an early kind of design activity. What is also promising, which you already know, is that there are multiple foundries doing these advanced node. I think overall, the industry seems pretty healthy. There are several key foundries all working on advanced node. We are optimistic, and like Lip-Bu Tan said, we see a lot of activity at these advanced nodes. That coupled with 3D IC at these advanced nodes, I think there is a lot of design activity that we see. When a fab comes out with a new flavor of the same node, that's almost as helpful to you as a new node would be? I think that just depends on the customer adoption. There is some work we do from an R&D standpoint to get ready for a new node or a variant of the same node. The work on variant of the same node is less than R&D work for a new node. It just depends from a work standpoint, but in terms of customer adoption, depends which nodes the customers will adopt, and we are glad to work with them in whichever flavor they choose based on their requirements. Okay. Thank you. Ladies and gentlemen, as a reminder, to ask a question, please press star one on your telephone keypad. Our next question coming from the line of Pradeep Ramani with UBS. Your line is open. Hi, thanks for taking my question. I have a couple of questions on system analysis. Maybe the first question is, now that you have NUMECA and Pointwise, do you feel like you have more or less the solution that you need to sort of scale both NUMECA and Pointwise together, or do you feel like it has to be finally bolted onto a core Cadence platform and integrated more? If so, what does sort of the R&D investment environment and even maybe the go-to-market investment environment look like? The time horizon look like? Is it sort of a one-year thing, or is it a longer duration sort of an investment cycle? Yeah, that's a great question. First of all, we do feel pretty good about Pointwise and NUMECA, like I mentioned. They are good technologies. They already have some scale, and we can scale them more with our sales force and customer connections. At the same time, we will enhance them with our organic technologies of parallel and distributed computing. We will definitely enhance them further. Like Lip-Bu Tan and John mentioned, I think all these investments are built into our guidance, and we feel good already in terms of At this point, we already have significant scale R&D investment in system analysis. Okay. Because of Clarity and other products. We feel good in terms of the amount of R&D we have already invested, and we'll go from there. I think the bottom line, we feel that Pointwise, NUMECA and our organic development, we have a lot of capabilities to scale it in the CFD market. Okay, as my follow-up, in terms of AWR, can you update us on how AWR is doing in terms of more customer traction and maybe year-over-year growth as part of your system analysis business? Yes, definitely. As you know, our system analysis business, if you compare from Q1 last year to Q1 this year, is up significantly, right. Close to 30%. AWR is a key part of that. There is some part of it that is M&A, organically also or after acquisition, both AWR and EMX, Integrand are growing well. If you've seen Lip-Bu's prepared comments, we mentioned Qualcomm has expanded use of AWR and Clarity. We don't break it out separately, these different products. Overall, they're growing well. We are happy of AWR and Integrand growth after acquisition by us because we can provide a more complete solution along with Virtuoso, Clarity, and Allegro's overall system design and analysis solution. Thank you. Our next question coming from the line of Ruben Roy with WestPark Capital. Your line is open. Thank you. John, I had a quick follow-up on the chip supply situation. Obviously, you're talking about impacts on your full year, and you've given us full year guidance for 2021. The commentary from the industry has been sort of all over the place in terms of when we might see some improvement, with some folks thinking as soon as second half. Just wondering if you have any perspective on when and how you're thinking about seeing some improvement in supply and when that might impact your business. Is it a 2022 event? Yeah, sure, Ruben. The forecast my team provided me looked like there was softness in Q2 and Q3 for the particular mix of customers that we generate IP royalty revenue from. It looked like it was recovering in Q4. I think that gets to your point. Again, I don't mean for this to be any commentary on the industry in any way. It's just the mix of customers that we recognize royalty revenue from. Okay. Yeah, I appreciate that. We're not seeing any slowdown in design activity at Cadence. Right. Okay. Thanks for that. I am trying to get as many data points as I can. I guess just a quick follow-up for Anirudh or Lip-Bu Tan just on sort of your customers, and you talked about Foundry a little bit here, but a large North American customer obviously is getting back again into the Foundry business and has cited early partnerships with you and your competitor. Just wondering if you have any perspective to add on what's going on here with that customer and if you're seeing any benefits coming from things like U.S. CHIPS Act or things like that on your business as you look over the next several years. Yeah, I think more manufacturing in U.S. is fairly welcome, and of course, any new Foundry or expansion is always good for us in term of tool and IP enablement. We're excited for opportunity, and then it will increase the design activity and also meet the customer requirement for the advanced nodes and packaging also. I think overall, we think it's a positive development, and we welcome that opportunity to provide the service and the design tool and IP to enable them. Right. Thank you, Lip-Bu Tan. Thank you. Now last question coming from the line of Vivek Arya with Bank of America. Your line is open. Lip-Bu, I just wanted to kind of follow up on your last commentary about U.S. manufacturing. I'm curious if there is more U.S.-based manufacturing and packaging and other activities, is that incremental to your business, or is that just a substitute for what you're doing in other regions? Yeah, it's very hard to tell, but I think overall it should be a net increase, because clearly, now we are very excited. We have a deep partnership with the TSMC, Samsung of the world. Anything new, they need a lot of more IP in terms of optimizing, and also they have their own process and PDK. I think overall, from my point of view, I think will be a net increase. We're happy to help. At the end of the day, it's the foundry, the EDA, and then how to meet our customer requirements when they want to move into a new foundry, they need a lot of different tool and optimization and process and library. Overall, I think will be a net improvement for us. Got it. Very helpful. John, maybe one for you on operating margin. Q1, I think at about 38%. I think Q2 you're guiding to 36%, if my model is right. For the full year, you're guiding to 35%-36%. Suggesting back half will be lower. Back half of this year could even be lower than what you had in second half of last year. Obviously, you had the one extra week of last year. I'm just curious, how are you thinking about leverage in the model? More importantly, when do you think you can get back to this rule of 50% that you were able to achieve before? Good question, Vivek. We don't see any near-term ceiling on operating margins. I was glad to see that even with the outlook at 35.5% at the midpoint, that I think we're now at 50% incremental margins comparing 2021- 2019. As long as we're delivering incremental margins of 50%, that clearly there's operating leverage in the model. What you're seeing in the impact, the reason that operating margins are slightly lower in the second half, it's the combination of two acquisitions and delayed hiring activity into the second half. That also we have a merit cycle that kicks in on July 1st. With all that said, we're heavily investing in building out a multi-physics platform for the future. Like I say, there's no near-term ceiling to that operating leverage. Got it. Thank you. No worries. Ladies and gentlemen, that's all the time we have for questions today. I would now like to turn the call back over to Lip-Bu Tan for closing remarks. Thank you all for joining us this afternoon. I'm very excited about the growing market opportunity and the business momentum so far in 2021. Our Intelligent System Design strategy is playing out very nicely as we benefit from the new opportunities in design excellence, system innovation, and pervasive intelligence, and an expanded total addressable market. I'm very pleased also to share that Fortune and the Great Place to Work have honored us as one of the 2021 100 Best Companies to Work For, which marks Cadence's seventh year in the row being named in this prestigious list. Cadence was recognized as one of the best companies to work for, thanks to our outstanding people-first culture and the history of innovation. Lastly, on behalf of our employees and our board of directors, we want to thank our customers and partners for their continued trust and confidence during these unprecedented times.