SAN JOSE, Calif. — July 22, 2024 — Cadence Design Systems, Inc. (Nasdaq: CDNS) today announced results for the second quarter of 2024.

•Revenue of $1.061 billion, compared to revenue of $977 million in Q2 2023

•GAAP operating margin of 28%, compared to 31% in Q2 2023

•Non-GAAP operating margin of 40%, compared to 42% in Q2 2023

•GAAP diluted net income per share of $0.84, compared to $0.81 in Q2 2023

•Non-GAAP diluted net income per share of $1.28, compared to $1.22 in Q2 2023

•Quarter-end backlog was $6.0 billion and current remaining performance obligations ("cRPO"), contract revenue expected to be recognized as revenue in the next 12 months, was $3.1 billion.

“Cadence delivered strong results for the second quarter of 2024, with robust demand for our cutting-edge technologies from AI, hyperscale, and automotive customers,” said Anirudh Devgan, president and chief executive officer. “I'm pleased with the strong momentum of our Cadence.AI portfolio and our next generation Z3 / X3 hardware systems, and am excited about the growing demand for our industry leading products from an expanding foundry ecosystem.”

“I am pleased with our strong Q2 results. We exceeded our outlook on all key financial metrics, closing Q2 with backlog of approximately $6 billion,” said John Wall, senior vice president and chief financial officer. “A good finish to the first half of the year, combined with ongoing demand for our solutions, sets us up for strong growth in the second half of 2024.”

Commentary on the second quarter of 2024 financial results by John Wall, senior vice president and chief financial officer, is available at www.cadence.com/cadence/investor_relations.

For fiscal year 2024, the company expects:

•Revenue in the range of $4.60 billion to $4.66 billion

•GAAP operating margin in the range of 29.7% to 31.3%

•Non-GAAP operating margin in the range of 41.7% to 43.3%

•GAAP diluted net income per share in the range of $3.82 to $4.02

•Non-GAAP diluted net income per share in the range of $5.77 to $5.97

For the third quarter of 2024, the company expects:

•Revenue in the range of $1.165 billion to $1.195 billion

•GAAP operating margin in the range of 27.7% to 29.3%

•Non-GAAP operating margin in the range of 40.7% to 42.3%

•GAAP diluted net income per share in the range of $0.83 to $0.93

•Non-GAAP diluted net income per share in the range of $1.39 to $1.49

The company utilizes a long-term projected non-GAAP tax rate, which reflects currently available information, as well as other factors and assumptions. The non-GAAP tax rate is subject to change for a variety of reasons, including the rapidly evolving global tax environment, significant changes in the company’s geographic earnings mix, or other changes to the company’s strategy or business operations. The company expects to use the current normalized non-GAAP tax rate through fiscal 2025 but will re-evaluate this rate periodically for significant items that may materially affect its projections.

Reconciliations of the financial results and business outlook from GAAP operating margin, GAAP net income and GAAP diluted net income per share to non-GAAP operating margin, non-GAAP net income and non-GAAP diluted net income per share, respectively, are included in this press release.

•Cadence.AI portfolio continues to gain momentum, offering unparalleled chip-to-systems design capabilities that empower our customers to achieve exceptional quality of results and productivity benefits

•IP business continued its strong momentum with AI, 3D-IC and HPC applications fueling demand for our IP titles at the most advanced nodes

•Major long-term development partner broadly deployed Palladium Z3 to deliver to its next generation AI product roadmap, further solidifying Cadence’s leadership in verification

•Closed BETA CAE acquisition and we now offer a comprehensive multiphysics platform covering electromagnetics, electrothermal, CFD and structural analysis solutions

Anirudh Devgan, president and chief executive officer, and John Wall, senior vice president and chief financial officer, will host the second quarter 2024 financial results audio webcast today, July 22, 2024, at 2 p.m. (Pacific) / 5 p.m. (Eastern). Attendees are asked to register at the website at least 10 minutes prior to the scheduled webcast. An archive of the webcast will be available starting July 22, 2024 at 5 p.m. (Pacific) and ending September 16, 2024 at 5 p.m. (Pacific). Webcast access is available at www.cadence.com/cadence/investor_relations.

Cadence is a pivotal leader in electronic systems design, building upon more than 30 years of computational software expertise. The company applies its underlying Intelligent System Design strategy to deliver software, hardware and IP that turn design concepts into reality. Cadence customers are the world’s most innovative companies, delivering extraordinary electronic products from chips to boards to complete systems for the most dynamic market applications, including hyperscale computing, 5G communications, automotive, mobile, aerospace, consumer, industrial and healthcare. For 10 years in a row, Fortune magazine has named Cadence one of the 100 Best Companies to Work For. Learn more at www.cadence.com.

This press release contains forward-looking statements, including Cadence's outlook on future operating results, financial condition, strategic objectives, business prospects, technology and product developments, industry trends and other statements using words such as “anticipates,” “believes,” “expects,” “intends,” “plans,” “will,” and words of similar import and the negatives thereof. Forward-looking statements are subject to a number of risks, uncertainties and other factors, many of which are outside Cadence’s control, and which may cause actual results to differ materially from expectations expressed or implied in the forward-looking statements, including, among others: (i) Cadence’s ability to compete successfully in the highly competitive industries in which it operates and realize the benefits of its investments in research and development, including opportunities presented by AI; (ii) the success of Cadence’s efforts to maintain and improve operational efficiency and growth; (iii) the mix of products and services sold, the timing of orders and deliveries and the ability to develop, install or deliver Cadence’s products or services; (iv) change in customer demands or supply constraints that could result in delays in purchases, development, installations or deliveries of Cadence’s products or services, including those resulting from consolidation, restructurings and other operational efficiency improvements of Cadence’s customers; (v) economic, geopolitical and industry conditions, including that of the semiconductor and electronics industries, government regulations and trade restrictions, and rising tensions and conflicts around the world such as in the Middle East and with respect to Taiwan; (vi) capital expenditure requirements, legislative or regulatory requirements, changes in tax laws, interest rates, currency exchange rate fluctuations, inflation rates, Cadence’s upcoming debt maturities and Cadence’s ability to access capital and debt markets; (vii) Cadence’s acquisition of other companies, businesses or technologies or the failure to successfully integrate and operate them; (viii) potential harm caused by compromises in cybersecurity and cybersecurity attacks; (ix) events that affect cash flow, liquidity, or reserves, or settlement assumptions Cadence may take from time to time with respect to accounts receivable, taxes and tax examinations, litigation, regulatory or other matters; (x) the effects of any litigation, regulatory, tax or other proceedings to which Cadence is or may become a party or to which Cadence or its products, services, technologies or properties are subject; and (xi) Cadence’s ability to successfully meet corporate governance, environmental and social targets and strategies. In addition, the timing and amount of Cadence’s repurchases of its common stock are subject to business and market conditions, corporate and regulatory requirements, stock price, acquisition opportunities and other factors.

All forward-looking statements in this press release are based on management's expectations as of the date of this press release and, except as required by law, Cadence disclaims any obligation to update these forward-looking statements to reflect future events or circumstances.

Non-GAAP financial measures should not be considered as a substitute for or superior to measures of financial performance prepared in accordance with generally accepted accounting principles, or GAAP. Investors are encouraged to review the reconciliation of non-GAAP measures contained within this press release with their most directly comparable GAAP results. Investors are also encouraged to look at the GAAP results as the best measure of financial performance.

To supplement Cadence’s financial results presented on a GAAP basis, Cadence management uses non-GAAP measures that it believes are helpful in understanding Cadence’s performance. One such measure is non-GAAP net income, which is a financial measure not calculated under GAAP. Non-GAAP net income is calculated by Cadence management by taking GAAP net income and excluding, as applicable, amortization of intangible assets, stock-based compensation expense, acquisition and integration-related costs including retention expenses, investment gains or losses, income or expenses related to Cadence’s non-qualified deferred compensation plan, restructuring and other significant items not directly related to Cadence’s core business operations, and the income tax effect of non-GAAP pre-tax adjustments.

Cadence management uses non-GAAP net income because it excludes items that are generally not directly related to the performance of Cadence’s core business operations and therefore provides supplemental information to Cadence management and investors regarding the performance of the business operations, facilitates comparisons to the historical operating results and allows the review of Cadence's business from the same perspective as Cadence management, including forecasting and budgeting.

The following tables reconcile the specific items excluded from GAAP operating margin, GAAP net income and GAAP net income per diluted share in the calculation of non-GAAP operating margin, non-GAAP net income and non-GAAP net income per diluted share for the periods shown below:

 

Operating Margin Reconciliation						Three Months Ended
						June 30, 2024						June 30, 2023
						(unaudited)
GAAP operating margin as a percent of total revenue						28%						31%
Reconciling items to non-GAAP operating margin as a percent of total revenue:
Stock-based compensation expense						8%						8%
Amortization of acquired intangibles						2%						2%
Acquisition and integration-related costs						2%						1%
Restructuring						0%						0%
Non-qualified deferred compensation expenses						0%						0%
Special charges						0%						0%
Non-GAAP operating margin as a percent of total revenue						40%						42%

For more information, please contact:

Cadence Investor Relations

408-944-7100

investor_relations@cadence.com

Cadence Newsroom

408-944-7039

newsroom@cadence.com

 

						June 30, 2024						December 31, 2023
Current assets:
Cash and cash equivalents						$	1,058,955					$	1,008,152
Receivables, net						564,851						489,224
Inventories						171,508						181,661
Prepaid expenses and other						401,074						297,180
Total current assets						2,196,388						1,976,217
Property, plant and equipment, net						449,422						403,213
Goodwill						2,417,747						1,535,845
Acquired intangibles, net						664,038						336,843
Deferred taxes						892,963						880,001
Other assets						605,183						537,372
Total assets						$	7,225,741					$	5,669,491
Current liabilities:
Current portion of long-term debt						$	349,732					$	349,285
Accounts payable and accrued liabilities						505,392						576,558
Current portion of deferred revenue						678,598						665,024
Total current liabilities						1,533,722						1,590,867
Long-term liabilities:
Long-term portion of deferred revenue						88,823						98,931
Long-term debt						998,935						299,771
Other long-term liabilities						343,369						275,651
Total long-term liabilities						1,431,127						674,353
Stockholders’ equity						4,260,892						3,404,271
Total liabilities and stockholders’ equity						$	7,225,741					$	5,669,491

 

						Three Months Ended												Six Months Ended
						June 30, 2024						June 30, 2023						June 30, 2024						June 30, 2023
Revenue:
Product and maintenance						$	960,457					$	922,790					$	1,873,842					$	1,886,532
Services						100,224						53,789						195,942						111,737
Total revenue						1,060,681						976,579						2,069,784						1,998,269
Costs and expenses:
Cost of product and maintenance						94,363						74,218						169,758						174,456
Cost of services						44,907						22,640						94,709						46,874
Marketing and sales						186,725						167,070						367,314						333,736
Research and development						370,740						354,416						749,698						704,711
General and administrative						63,436						54,605						132,152						108,132
Amortization of acquired intangibles						6,667						4,302						12,074						8,569
Restructuring						(33)						—						247						—
Total costs and expenses						766,805						677,251						1,525,952						1,376,478
Income from operations						293,876						299,328						543,832						621,791
Interest expense						(12,905)						(8,877)						(21,597)						(18,137)
Other income, net						34,739						7,973						103,518						16,257
Income before provision for income taxes						315,710						298,424						625,753						619,911
Provision for income taxes						86,190						77,304						148,590						156,987
Net income						$	229,520					$	221,120					$	477,163					$	462,924
Net income per share - basic						$	0.85					$	0.82					$	1.77					$	1.72
Net income per share - diluted						$	0.84					$	0.81					$	1.74					$	1.70
Weighted average common shares outstanding - basic						270,912						269,714						270,259						269,607
Weighted average common shares outstanding - diluted						273,520						272,996						273,532						273,078

 

			2023																														2024
GEOGRAPHY			Q1						Q2						Q3						Q4						Year						Q1						Q2
Americas			44		%				41		%				43		%				44		%				43		%				46		%				49		%
China			17		%				18		%				17		%				15		%				17		%				12		%				12		%
Other Asia			18		%				18		%				19		%				19		%				19		%				20		%				19		%
Europe, Middle East and Africa			15		%				17		%				15		%				16		%				16		%				17		%				14		%
Japan			6		%				6		%				6		%				6		%				5		%				5		%				6		%
Total			100		%				100		%				100		%				100		%				100		%				100		%				100		%

 

			2023																														2024
PRODUCT CATEGORY			Q1						Q2						Q3						Q4						Year						Q1						Q2
Custom IC Design and Simulation			20		%				22		%				22		%				22		%				22		%				22		%				21		%
Digital IC Design and Signoff			25		%				27		%				28		%				29		%				27		%				29		%				27		%
Functional Verification, including Emulation and Prototyping Hardware			32		%				27		%				26		%				24		%				27		%				25		%				25		%
IP			11		%				11		%				11		%				13		%				12		%				12		%				13		%
System Design and Analysis			12		%				13		%				13		%				12		%				12		%				12		%				14		%
Total			100		%				100		%				100		%				100		%				100		%				100		%				100		%

 

						Three Months Ending September 30, 2024						Year Ending December 31, 2024
						Forecast						Forecast
GAAP operating margin as a percent of total revenue						27.7% - 29.3%						29.7% - 31.3%
Reconciling items to non-GAAP operating margin as a percent of total revenue:
Stock-based compensation expense						9%						8%
Amortization of acquired intangibles						2%						2%
Acquisition and integration-related costs						2%						2%
Non-qualified deferred compensation expenses						0%						0%
Non-GAAP operating margin as a percent of total revenue†						40.7% - 42.3%						41.7% - 43.3%

 

						Three Months Ending September 30, 2024						Year Ending December 31, 2024
						Forecast						Forecast
Diluted net income per share on a GAAP basis						$0.83 to $0.93						$3.82 to $4.02
Stock-based compensation expense						0.38						1.43
Amortization of acquired intangibles						0.10						0.33
Acquisition and integration-related costs						0.10						0.34
Non-qualified deferred compensation expenses						—						0.02
Special charges						—						—
Other income or expense related to investments and non-qualified deferred compensation plan assets*						—						(0.32)
Income tax effect of non-GAAP adjustments						(0.02)						0.15
Diluted net income per share on a non-GAAP basis†						$1.39 to $1.49						$5.77 to $5.97

 

						Three Months Ending September 30, 2024						Year Ending December 31, 2024
($ in millions)						Forecast						Forecast
Net income on a GAAP basis						$228 to $256						$1,049 to $1,103
Stock-based compensation expense						106						391
Amortization of acquired intangibles						26						90
Acquisition and integration-related costs						27						93
Non-qualified deferred compensation expenses						—						6
Special charges						—						1
Other income or expense related to investments and non-qualified deferred compensation plan assets*						—						(87)
Income tax effect of non-GAAP adjustments						(5)						41
Net income on a non-GAAP basis†						$382 to $410						$1,584 to $1,638

* Fiscal 2020 was a 53-week year, compared to all other years which were 52 week years. 2020 (which impacts the 3 year CAGR in 2023) included approximately $45 million revenue impact for the extra week.

** At midpoint of guidance.

Profitability Trends

(In Millions)			2018						2019						2020						2021						2022						2023									2024E*
Revenue			$	2,138					$	2,336					$	2,683					$	2,988					$	3,562					$	4,090								$	4,630
Revenue Growth			10%						9%						15%						11%						19%						15%									13%
3-Year Revenue Growth CAGR			8%						9%						11%						12%						15%						15%									16%
GAAP operating margin			19%						21%						24%						26%						30%						31%									30.5%
Non-GAAP operating margin			30.2%						32.1%						35.2%						37.2%						40.3%						42.0%									42.5%
Stock-based compensation			(7.8)%						(7.8)%						(7.4)%						(7.0)%						(7.6)%						(8.0)%									(8.4)%
Non-GAAP operating margin adjusted for stock-based compensation			22.4%						24.3%						27.8%						30.2%						32.7%						34.0%									34.1%
GAAP operating income			$	396					$	492					$	646					$	779					$	1,074					$	1,251								$	1,386
Non-GAAP operating income			$	647					$	749					$	944					$	1,111					$	1,436					$	1,717								$	1,967
Non-GAAP operating income adjusted for stock-based compensation			$	479					$	567					$	747					$	901					$	1,166					$	1,391								$	1,576

* At midpoint of guidance.

Backlog

(In Billions)			2020						2021						2022						2023									Q2 2024
Backlog			$	3.9					$	4.4					$	5.8					$	6.0								$	6.0

Revenue

(In Millions)			Q2 2023						Q3 2023						Q4 2023						Q1 2024									Q2 2024
Product and Maintenance			$	923					$	966					$	982					$	913								$	961
Services			54						57						87						96									100
Total Revenue			$	977					$	1,023					$	1,069					$	1,009								$	1,061

Recurring and Up-Front Revenue

			Q2 2023						Q3 2023						Q4 2023						Q1 2024									Q2 2024
Revenue recognized over time			82		%				83		%				85		%				87		%							85		%
Revenue from arrangements with non-cancelable commitments			3		%				2		%				2		%				3		%							3		%
Recurring Revenue			85		%				85		%				87		%				90		%							88		%
Up-Front Revenue			15		%				15		%				13		%				10		%							12		%
Total			100		%				100		%				100		%				100		%							100		%

Trailing Twelve Months Recurring and Up-Front Revenue

			Trailing Twelve Months Ended
			Q2 2023						Q3 2023						Q4 2023						Q1 2024									Q2 2024
Recurring Revenue			84		%				84		%				84		%				87		%							87		%
Up-Front Revenue			16		%				16		%				16		%				13		%							13		%
Total			100		%				100		%				100		%				100		%							100		%

Revenue Mix by Geography

(% of Total Revenue)			Q2 2023						Q3 2023						Q4 2023						Q1 2024									Q2 2024
Americas			41		%				43		%				44		%				46		%							49		%
China			18		%				17		%				15		%				12		%							12		%
Other Asia			18		%				19		%				19		%				20		%							19		%
Europe, Middle East and Africa			17		%				15		%				16		%				17		%							14		%
Japan			6		%				6		%				6		%				5		%							6		%
Total			100		%				100		%				100		%				100		%							100		%

Revenue Mix by Product Category

(% of Total Revenue)			Q2 2023						Q3 2023						Q4 2023						Q1 2024									Q2 2024
Custom IC Design and Simulation			22		%				22		%				22		%				22		%							21		%
Digital IC Design and Signoff			27		%				28		%				29		%				29		%							27		%
Functional Verification			27		%				26		%				24		%				25		%							25		%
IP			11		%				11		%				13		%				12		%							13		%
System Design and Analysis			13		%				13		%				12		%				12		%							14		%
Total			100		%				100		%				100		%				100		%							100		%

Gross Margin

			Q2 2023						Q3 2023						Q4 2023						Q1 2024									Q2 2024
GAAP Gross Margin			90.1		%				89.3		%				90.3		%				87.6		%							86.9		%
Non-GAAP Gross Margin			91.4		%				90.6		%				91.7		%				89.1		%							88.5		%

Total Costs and Expenses

(In Millions)			Q2 2023						Q3 2023						Q4 2023						Q1 2024									Q2 2024
Total GAAP Costs and Expenses			$	677					$	730					$	732					$	759								$	767
Total Non-GAAP Costs and Expenses			$	569					$	603					$	610					$	627								$	635

Operating Margin

			Q2 2023						Q3 2023						Q4 2023						Q1 2024									Q2 2024
GAAP Operating Margin			30.7		%				28.6		%				31.5		%				24.8		%							27.7		%
Non-GAAP Operating Margin			41.8		%				41.1		%				42.9		%				37.8		%							40.1		%

Net Income Per Share

			Q2 2023						Q3 2023						Q4 2023						Q1 2024									Q2 2024
GAAP Net Income Per Share			$	0.81					$	0.93					$	1.19					$	0.91								$	0.84
Non-GAAP Net Income Per Share			$	1.22					$	1.26					$	1.38					$	1.17								$	1.28

Total DSO

			Q2 2023						Q3 2023						Q4 2023						Q1 2024									Q2 2024
DSO			42						39						43						36									49

Free Cash Flow

(In Millions)			Q2 2023						Q3 2023						Q4 2023						Q1 2024									Q2 2024
Net Cash from Operating Activities			$	414					$	396					$	272					$	253								$	156
Capital Expenditures			20						22						34						49									29
Free Cash Flow			$	394					$	374					$	238					$	204								$	127

Cash and Cash Equivalents

(In Millions)			Q2 2023						Q3 2023						Q4 2023						Q1 2024									Q2 2024
Cash and Cash Equivalents			$	874					$	962					$	1,008					$	1,012								$	1,059

•Approximately 26 percent of our cash and cash equivalents were in the U.S. at quarter-end.

Share Repurchase

(In Millions)			Q2 2023						Q3 2023						Q4 2023						Q1 2024									Q2 2024
Share Repurchase			$	265					$	185					$	125					$	125								$	125
Number of Shares			1.178						0.811						0.488						0.425									0.423

•Q3 2023 includes 276,330 shares and $60 million equity forward contract from Q2 2023 ASR settled in Q3 2023.

Employees

			Q2 2023						Q3 2023						Q4 2023						Q1 2024									Q2 2024
Headcount			10,832						11,139						11,226						11,753									12,665

This CFO Commentary contains forward-looking statements, including Cadence's outlook on future operating results, financial condition, strategic objectives, business prospects, technology and product developments, industry trends and other statements using words such as “anticipates,” “believes,” “expects,” “intends,” “plans,” “will,” and words of similar import and the negatives thereof. Forward-looking statements are subject to a number of risks, uncertainties and other factors, many of which are outside Cadence’s control and which may cause actual results to differ materially from expectations expressed or implied in the forward-looking statements, including, among others: (i) Cadence’s ability to compete successfully in the highly competitive industries in which it operates and realize the benefits of its investments in research and development, including opportunities presented by AI; (ii) the success of Cadence’s efforts to maintain and improve operational efficiency and growth; (iii) the mix of products and services sold, the timing of orders and deliveries and the ability to develop, install or deliver Cadence’s products or services; (iv) change in customer demands or supply constraints that could result in delays in purchases, development, installations or deliveries of Cadence’s products or services, including those resulting from consolidation, restructurings and other operational efficiency improvements of Cadence’s customers; (v) economic, geopolitical and industry conditions, including that of the semiconductor and electronics industries, government regulations and trade restrictions, and rising tensions and conflicts around the world such as in the Middle East and with respect to Taiwan; (vi) capital expenditure requirements, legislative or regulatory requirements, changes in tax laws, interest rates, currency exchange rate fluctuations, inflation rates, Cadence's upcoming debt maturities and Cadence’s ability to access capital and debt markets; (vii) Cadence’s acquisition of other companies, businesses or technologies or the failure to successfully integrate and operate them; (viii) potential harm caused by compromises in cybersecurity and cybersecurity attacks; (ix) events that affect cash flow, liquidity, or reserves, or settlement assumptions Cadence may take from time to time with respect to accounts receivable, taxes and tax examinations, litigation, regulatory or other matters; (x) the effects of any litigation, regulatory, tax or other proceedings to which Cadence is or may become a party or to which Cadence or its products, services, technologies or properties are subject; and (xi) Cadence’s ability to successfully meet corporate governance, environmental and social targets and strategies. In addition, the timing and amount of Cadence’s repurchases of its common stock are subject to business and market conditions, corporate and regulatory requirements, stock price, acquisition opportunities and other factors.

All forward-looking statements in this document are based on management's expectations as of the date of this document and, except as required by law, Cadence disclaims any obligation to update these forward-looking statements to reflect future events or circumstances.

Non-GAAP financial measures should not be considered as a substitute for or superior to measures of financial performance prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of non-GAAP financial measures contained within this CFO Commentary with their most directly comparable GAAP financial results. Investors are also encouraged to look at the GAAP results as the best measure of financial performance. See our earnings press release issued today for further discussion of our non-GAAP financial measures, as well as the reconciliation provided in the Appendix to this CFO Commentary.

Cadence’s management uses non-GAAP net income because it excludes items that are generally not directly related to the performance of the company’s core business operations and therefore provides supplemental information to Cadence’s management and investors regarding the performance of the business operations, facilitates comparisons to the historical operating results and allows the review of Cadence’s business from the same perspective as Cadence’s management, including forecasting and budgeting.

Reconciliation of GAAP to Non-GAAP Financial Measures (Unaudited)

Reconciliation of GAAP Total Expenses to Non-GAAP Total Expenses

(In Millions)			Q2 2023						Q3 2023						Q4 2023						Q1 2024									Q2 2024
GAAP total costs and expenses			$	677					$	730					$	732					$	759								$	767
Reconciling items to non-GAAP total costs and expenses
Stock-based compensation expense			(76)						(88)						(87)						(88)									(88)
Amortization of acquired intangibles			(15)						(15)						(17)						(17)									(20)
Acquisition and integration-related costs			(14)						(14)						(13)						(22)									(21)
Restructuring			—						(12)						1						—									—
Non-qualified deferred compensation (expenses) credits			(3)						2						(6)						(5)									(2)
Special charges			—						—						—						—									(1)
Non-GAAP total costs and expenses*			$	569					$	603					$	610					$	627								$	635

Reconciliation of GAAP Total Expenses to Non-GAAP Total Expenses

(In Millions)			2018						2019						2020*						2021						2022						2023									2024E
GAAP total costs and expenses			$	1,742					$	1,845					$	2,037					$	2,209					$	2,488					$	2,839								$	3,244
Reconciling items to non-GAAP total costs and expenses
Stock-based compensation expense			(168)						(182)						(197)						(210)						(270)						(326)									(391)
Amortization of acquired intangibles			(53)						(53)						(64)						(67)						(60)						(62)									(90)
Acquisition and integration-related costs			(20)						(8)						(23)						(23)						(41)						(56)									(93)
Restructuring			(11)						(9)						(9)						1						—						(11)									—
Non-qualified deferred compensation (expenses) credits			1						(5)						(5)						(6)						8						(11)									(6)
Special charges**			—						(1)						—						(27)						—						—									(1)
Non-GAAP total costs and expenses***			$	1,491					$	1,587					$	1,739					$	1,877					$	2,125					$	2,373								$	2,663