Guidance: Shelagh Glaser: We are raising our cash flow from operations guidance by $500 million to approximately $2.8 billion on strong cash collections and reducing our CapEx guidance to approximately $225 million, resulting in free cash flow of approximately $2.6 billion, an increase of $600 million versus our previous guidance.
Demand and orders: Sassine Ghazi: In mobile, consumer and edge AI, our USB IP has now crossed $2 billion in lifetime bookings with Tier 1 design wins already moving to the leading-edge node. As AI expands beyond digital infrastructure into physical products, demand for silicon will continue to expand, providing a tailwind for our standards-based IP business.
Margins: Shelagh Glaser: We delivered an outstanding Q3, achieving revenue of $2.477 billion, non-GAAP operating margin of 41.6% and non-GAAP EPS of $3.91, all beating the high end of our guidance range.
Analyst Q&A
Analyst Jason Celino asked: Really good results here. I think what really stuck out to me was the 8% EDA growth, which was stable with last quarter despite the harder comp. You mentioned it's supposed to accelerate to double digits in Q4 and the full year. I mean, how would you describe what's driving that incremental acceleration? Management Sassine Ghazi answered: AI is definitely a tailwind. As customers are rethinking of how to reengineer their chip design engineering, it's requiring different methods for that engineering. So that's driving another tailwind for us. And hardware, we had a record revenue year on hardware. So all in all, that 8-plus percent is organic growth for EDA that we're fairly excited about.
