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President and CEO Neil Barua responded positively to both points. Regarding Ansys/Synopsys, he expressed enthusiasm for the transaction and noted he has already been in discussions with Synopsys's CEO to strengthen and expand the partnership. On multi-product deals, he confirmed they are seeing more of these conversations, particularly at customer events, which validates the strategy of aggregating CAD, PLM, and ALM, especially in the context of AI.

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CEO Neil Barua emphasized that the go-to-market transformation is designed to capture more wallet share by expanding core Windchill and Creo usage and cross-selling ALM and SLM, citing a recent CAD consolidation win as proof. CRO Robert Dahdah added that compensation plans are now aligned with this strategy, and the vertical focus allows for more credible, problem-solving conversations with customers, which elevates the engagement and strengthens the value proposition.

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CEO Neil Barua explained that PTC's AI development, which began within individual product teams like ServiceMax, is now being centralized for better alignment. Regarding manufacturing, Barua clarified that PTC's strategy is to extend PLM data to the factory floor to integrate with, rather than compete against, existing MES systems.

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CEO Neil Barua explained that PTC's automotive focus has shifted significantly to Windchill (PLM) and Codebeamer (ALM) to address the complexities of software-defined vehicles, a major change from its historical focus. Regarding the digital thread, he noted that no single vertical is dramatically ahead, which he views as a significant opportunity to cross-sell the integrated portfolio across all key industries.

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President & CEO Anirudh Devgan agreed that workflow automation is key, highlighting the critical role of the Cadence JEDI platform. He described JEDI as the underlying 'Joint Enterprise Data and AI' platform that provides the necessary data management and storage to enable complex, multi-tool agentic workflows, supporting on-prem, cloud, and hybrid customer environments.

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CEO Anirudh Devgan highlighted three critical R&D investment themes: 1) Expanding AI in chip design, with over 50% of designs now using their AI-enabled tools; 2) 3D-IC technology, a long-term driver requiring investment in tools, analysis, and IP; and 3) Hardware-software co-optimization across CPUs, GPUs, and their own Palladium hardware.

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CFO John Wall acknowledged the need to grow the annual value of the backlog (cRPO) and stated it would be a key focus for 2025. He noted that the China headwind negatively impacts this metric. He also explained that total backlog is expected to dip in the first half of 2025 due to the timing of renewals, which are more concentrated in the second half of the year.

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CEO Anirudh Devgan outlined a multi-horizon AI strategy and noted that while most solutions are horizontal, vertical-specific offerings like Millennium will emerge. For SD&A, he stated the portfolio is now largely complete and outgrowing the market, supported by a three-pronged go-to-market strategy of direct sales, a growing indirect channel of over 100 partners, and the Cadence OnCloud e-commerce platform.

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Chairman & CEO Shantanu Narayen explained that the hiring aligns with the company's innovation roadmap. Marketing investments are to build awareness for new products like Express, while product management hiring is focused on enhancing product-led growth (PLG) motions. He clarified that overall headcount is not growing dramatically due to internal efficiencies gained from AI, and the recent quarterly increase was largely driven by the influx of summer interns.

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Dan Durn, EVP and CFO, expressed confidence in future business momentum, citing large enterprise deals and cross-cloud opportunities, but did not guide specifically on cRPO growth. David Wadhwani, President of Digital Media, clarified that the new tiering strategy will be a combination of access to specific features and associated usage limits, representing an evolution from past models like generative credits.

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President of Digital Media David Wadhwani and CEO Shantanu Narayen responded. Wadhwani confirmed the strategy, detailing significant GTM ramp-up across direct sales, social media, and partnerships to reach new audiences for Express. He stated unequivocally, 'we're going to pour more gas on it, not less.' Narayen added that the company continues to invest in key long-term growth initiatives like Express while delivering phenomenal margins.

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CFO Shelagh Glaser confirmed strong backlog growth, up $400 million quarter-over-quarter. CEO Sassine Ghazi detailed that 'reengineering engineering' involves integrating multi-physics with electronics for complex systems. He distinguished the first AI wave (optimization tools like DSO.ai) from the next wave, Agentik.ai, which will use AI agents for specific engineering tasks, ultimately transforming workflows and creating new monetization opportunities.

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CFO Shelagh Glaser confirmed strong backlog growth, up $400 million quarter-over-quarter, reflecting a strong business environment. CEO Sassine Ghazi elaborated that 'reengineering engineering' involves integrating multi-physics with electronics for complex systems. He described the AI evolution as a paradigm shift from optimization to agent-based technology, which will transform workflows and create new monetization opportunities.

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CEO Sassine Ghazi stated that R&D investment is increasing in aggregate across the industry, from advanced to mature nodes, and Synopsys is growing along with this trend. On the second point, he explained that while current AI tools have not fundamentally changed the design workflow, he believes upcoming 'Agentic AI' will. This shift in workflow, he argued, represents a significant new monetization opportunity, distinguishing it from past innovations.

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CEO Sassine Ghazi explained that operational alignment involves scaling the company's structure and modernizing internal engineering workflows to improve R&D productivity. Regarding AI, he described a three-stage evolution: first, embedding AI into products (e.g., DSO.ai); second, enabling customer-specific AI models for their unique workflows; and third, the future of generative/agentic AI, which he believes will drive entirely new business models and product offerings.

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CEO Sassine Ghazi explained that generative AI development is moving at a faster, more customer-specific pace than traditional EDA. He agreed with the view that AI capabilities will eventually become an expected, integrated part of the core solution. Regarding analog design, he noted the opportunity is to grow in the analog design environment TAM, where Synopsys is smaller, by leveraging new technologies like ASO.ai to address rising complexity and modernization needs.

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CEO Andrew Anagnost highlighted accelerated roadmaps for Fusion's data management and plans to deepen Forma's integration with Revit. He explained that channel consolidation is a deliberate strategy to foster more solution-focused partners, which has already benefited the Autodesk store through better price realization. The risk of partners not focusing on new business is managed through incentive structures.

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CEO Andrew Anagnost focused his response on two key growth drivers: enhancing channel productivity to boost core subscription sales and accelerating the growth of emerging 'Make' businesses. He specified that investments are being reallocated to accelerate the roadmaps for the Forma, Fusion, and Construction industry clouds, expand platform APIs, and develop more commercial AI features like the 'AutoConstrain' tool in Fusion.

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Interim CFO Betsy Rafael addressed the CRPO question, noting that underlying growth was consistent with Q2 after accounting for headwinds and tailwinds, such as the declining contribution from large EBA cohorts renewing in FY26. CEO Andrew Anagnost confirmed the CRO role will remain separate under the COO, focusing on direct customer engagement and channel transformation.

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CEO Andrew Anagnost explained that the new model will drive efficiencies and productivity in sales and marketing, which is where future margin growth will originate. Regarding co-terming, he noted that while it shifts the timing of some billings, it is a net positive as it creates significant efficiency in the renewal process and provides better opportunities for cross-selling and upselling. Interim CFO Betsy Rafael added that managing fewer, consolidated contracts also drives internal cost efficiencies.

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Executive Chair Greg Bentley noted that the year-plus backlog of customers is a buffer, and the trend of multi-year E365 escalations reflects customer confidence. CEO Nicholas Cumins stated that customers are optimistic and leveraging E365 for more software access, the opposite of disaggregation. He added that while traditionally focused on new infrastructure, growing the business tied to existing asset operations is a major future opportunity.

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CEO Nicholas Cumins clarified the new COO's role is cross-functional, focusing on planning, execution, industry solutions, and growth initiatives like Asset Analytics. He confirmed the combination of account and success management teams has been highly beneficial. Executive Gregory Bentley added that the new COO brings valuable experience in commercial model innovation.

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Executive Chair Greg Bentley and executive Julien Moutte both confirmed a shift towards horizontal, platform-based decisions. They explained that customers, particularly large engineering firms, are prioritizing intelligent data management and platform openness to ensure their data is accessible for future AI applications, making these key criteria in their evaluation process.

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