Cadence System reported 4Q results and FY19 outlook which provided hefty upside. Revenue growth for FY18 accelerated to 10% over 2017's 7%. Guidance is 7% yoy for 2019E mostly due to the timing of hardware sales, some of it which was booked in the fourth quarter of 2018. Despite higher mix of hardware which typically carries a lower margin, overall EBIT margins were 31.6% in 4Q18, +60bps higher than consensus, as operating expenses were lower than expected.
Big wins driving revenue
In aerospace and defense, Cadence won business deals with GE Aviation and BAE systems.