And the customers want this integration like I mentioned, like Jay mentioned earlier, system companies and semi companies. So, I think this is, again, an irreversible trend. There is a need for power analysis, thermal analysis. When you look at 3D-IC, one of the biggest things I have mentioned before is thermal simulation. Cadence is in the best position to provide that. Electromagnetic simulations, our products will run like 10x, 20x faster and higher performance because of our computational software trend. So, I don’t see anything in the near-term that will change that. I mean this is going to continue, right. So, we are pretty confident where we are. And as you know, we are expanding to other areas using the expertise, whether it’s computational fluid dynamics or biosimulation.
And I think this is another irreversible trend, the need of simulation. And the other thing that we are investing heavily in that space, which I mentioned in my prepared remarks, is AI and optimization. That area still, they could barely simulate things in that €“ you could barely simulate a wing or a car properly, right. Forget about optimization. But with optimality, not only we can simulate, we can put that in the inner loop of a reinforcement-based AI engine to give results automatically that, that space has not seen. So, I am actually very optimistic about AI-driven optimization in the system space because it’s entirely new to that set of customers, along with like regular simulation performance and capacity improvement. So, I think we are still a small part of the market, but growing rapidly.
I think we crossed $400 million in revenue in that important segment. And I think there is a lot of room to grow there.
Vivek Arya: Understood. And for my follow-up, John, not complaining at all, but when I look at the implied incremental EBIT margin for this year, it seems somewhat lower than the average incremental margins that you have managed to achieve over the last few years. Just wanted to make sure we are not missing anything from a cost perspective that could restrain incremental EBIT leverage this year.
John Wall: That’s a great question, Vivek. I mean and thanks for pointing incremental margins. As you know, we focus very carefully on those. Over the last €“ I mean we are very pleased that I think 2022, I think was the sixth year in a row we achieved over 50% incremental margins. And the range that we have achieved over that period of time have ranged from 52%, I think to 58% incremental margin over the last 6 years. So, very, very pleased with that. And we are starting this year with slightly less in the guide. I think it’s 48.5% is what is implied in the guide. But that is the largest and strongest €“ the largest initial guide and the strongest start to any of the 7 years €“ of the last 7 years, right. So, very, very pleased to be in this position starting off the year.
And as you know, throughout the year, we tried to find profitable and sustainable revenue growth to improve that through the year. And we have managed to achieve that 6 years running, feel confident about doing that for a seventh year.
Vivek Arya: Understood. Thank you very much.
Operator: Our next question comes from Blair Abernethy from Rosenblatt Securities. Please go ahead. Your line is open.
Blair Abernethy: Thanks very much and great quarter, guys. Just wanted to see if there is anything to update on the Future Facilities acquisition last summer. You have had it for a couple of quarters now. How is that trending? And are you seeing opportunities to cross-sell your other simulation software into that space?
