Xilinx Reports Record Revenues And EPS In Fiscal Third Quarter
SAN JOSE, Calif., Jan. 23, 2019 /PRNewswire/ -- Xilinx, Inc. (Nasdaq: XLNX) today announced record revenues of $800 million for the third quarter of fiscal year 2019, up 7% from the prior quarter and up 34% year over year. GAAP net income for the December quarter was $239 million, or $0.93 per diluted share. Non-GAAP net income for the December quarter was $237 million, or $0.92 per diluted share.
The Xilinx Board of Directors declared a quarterly cash dividend of $0.36 per outstanding share of common stock payable on February 21, 2019 to all stockholders of record at the close of business on February 6, 2019.
Additional third quarter of fiscal year 2019 comparisons are represented in the charts below. Due to the adoption of the new revenue recognition standard in the first quarter of fiscal year 2019, all fiscal 2018 results have been restated to conform to the new standard:
Q3 2019 Financial Highlights
(In millions, except EPS)
GAAP
Q3
Q2
Q3
FY 2019 FY 2019 FY 2018 Q-T-Q Y-T-Y
Net revenues* $800 $746 $599 7% 34%
Operating income $258 $233 $161 11% 60%
Net income (loss) $239 $216 $(12) 11%
NM
Diluted earnings (loss) per share $0.93 $0.84 $(0.05) 11%
NM
Non-GAAP
Q3
Q2
Q3
FY 2019 FY 2019 FY 2018 Q-T-Q Y-T-Y
Net revenues* $800 $746 $599 7% 34%
Operating income $263 $236 $162 12% 63%
Net income $237 $221 $167 7% 42%
Diluted earnings per share $0.92 $0.87 $0.65 6% 42%
*No adjustment between GAAP
and Non-GAAP
"I am very excited to report yet another record revenue and earnings quarter. During the third fiscal quarter, we delivered revenues of $800 million, representing 34% year over year growth. Based on the guidance we are providing for the fiscal fourth quarter, we expect to exceed $3 billion in annual revenues for the first time in our history. In addition to the robust revenue growth, we also demonstrated strong profitability by posting over 60% growth in non-GAAP operating income and over 40% growth in non-GAAP diluted earnings per share year over year. We continue to execute to our strategy and drive growth across our portfolio," said Victor Peng, President and Chief Executive Officer.
Net Revenues by Geography:
Percentages Growth Rates
Q3 Q2 Q3
FY 2019 FY 2019 FY 2018 Q-T-Q Y-T-Y
---
North
America 28% 28% 31% 9% 24%
Asia
Pacific 46% 44% 41% 12% 47%
Europe 18% 20% 20% (5%) 24%
Japan 8% 8% 8% 4% 26%
Net Revenues by End Market:
Percentages Growth Rates
Q3 Q2 Q3 Q-T-Q Y-T-Y
FY 2019 FY 2019 FY 2018
---
Data Center and TME 21% 21% 25% 5% 14%
Automotive, Broadcast and
Consumer 15% 16% 17% 2% 20%
Communications 35% 35% 33% 8% 41%
Industrial, Aerospace &
Defense 27% 25% 31% 16% 17%
Channel 2% 3% (6%)
NM
NM
Net Revenues by Product:
Percentages Growth
Rates
Q3 Q2 Q3
FY 2019 FY 2019 FY 2018 Q-T-Q Y-T-Y
---
Advanced
Products 66% 64% 58% 9% 51%
Core Products 34% 36% 42% 3% 9%
Products are classified as follows:
Advanced Products: Alveo, UltraScale+, Ultrascale and 7-series products.
Core Products: Virtex-6, Spartan-6, Virtex?5, CoolRunner?II, Virtex-4, Virtex-II, Spartan-3, Spartan-2, XC9500 products, configuration solutions, software & support/services.
Key Statistics:
(Dollars in millions)
Q3 Q2 Q3
FY 2019 FY 2019 FY 2018
---
Annual Return on Equity (%)* 34 34 17
Operating Cash Flow $314 $313 $185
Depreciation Expense (including
software amortization) $18 $16 $11
Capital Expenditures (including
software) $20 $14 $7
Combined Inventory Days 109 100 124
Revenue Turns (%) 40 48 43
*Return on equity calculation:
Annualized year to date net income/
average stockholders' equity
Product and Financial Highlights - Fiscal Third Quarter 2019
-- Data Center and Test, Measurement & Emulation (TME) revenues grew 14%
year over year driven primarily by the Data Center business
(ex-Cryptocurrency) and TME business, which both experienced double
digit growth during the quarter. Xilinx continued its strong design win
momentum in Data Center across multiple applications including big data
acceleration, machine learning inference, video transcoding, network
acceleration and storage controllers. The Company also has won designs
for SmartNIC applications with multiple hyperscalers. Further developing
its platform ecosystem, the Company significantly increased the
cumulative number of Xilinx community developers trained on SDAccel to
over 2,250. FaaS engagement momentum continued to build with Amazon,
Alibaba, Huawei and other hyperscalers. TME revenues were strong across
both the Test & Measurement area and Emulation & Prototyping, reflecting
strong product leadership position in those markets.
-- Communications revenues increased 41% year over year, driven by strength
in the Wireless Communications business. Wireless Communications
benefitted from 5G deployment in South Korea and preparation for 5G
deployment in both China and North America as well as ongoing LTE
upgrades. Wireless Communications also saw continued momentum across
both radio and baseband applications with OEM customers across multiple
geographies. Wired business grew year over year with strength from
Optical/Data Center Interconnect applications.
-- Xilinx continued engagement momentum with several leading automotive
customers during the quarter with the goal of enabling their roadmap
toward automated driving. During the Xilinx Developer Forum in
Frankfurt, Daimler showcased its AI solution in the new Mercedes GLE
Sport Utility Vehicle that is powered by Xilinx machine learning
algorithms and MPSoCs. In addition, ZF Friedrichshafen AG, a global
leader and Tier-1 automotive supplier, recently announced a strategic
collaboration in which Xilinx technology will power their
highly-advanced AI based automotive control unit to enable automated
driving applications.
-- The Advanced Products category increased 51% year over year during the
quarter. Revenue from 16nm products continued its strong ramp with
broad-based adoption, increasing approximately 4x during the same
period. Zynq-based revenues, grew approximately 80% year over year
driven by a broad set of applications across multiple end markets,
served in particular by MPSoC. Zynq MPSoC revenues grew over 3x compared
to fiscal third quarter 2018.
-- Extending its significant technology leadership, Xilinx taped out Versal
- the industry's first Adaptive Compute Acceleration Platform (ACAP) at
the end of fiscal third quarter. Built on TSMC's 7nm FinFET process
technology, the Versal portfolio is the first platform to combine
software programmability with domain-specific hardware acceleration and
the adaptability essential for today's rapid pace of innovation.
Business Outlook - Fiscal Fourth Quarter 2019
The following statements are based on current expectations, and as indicated, are presented on a GAAP and non-GAAP basis. These statements are forward-looking and actual results may differ materially, as a result of, among other things, the important factors discussed at the end of this release.
Fiscal Fourth Quarter 2019
GAAP
Non-GAAP
Non-GAAP
Adjustments
---
Revenues
$815M - $835M
$815M - $835M
--- ---
Gross Margin ~68.5% ~68.5%
--- ---
Operating Expenses
~$310M
$5M (1)
~$305M
--- ---
Other Income
~$4M
~$4M
--- ---
Tax Rate 6% - 8% 6% - 8%
--- ---
Notes regarding Non-GAAP Adjustments:
(1) Excludes an estimated amount of
$5 million in M&A related
expenses and amortization of
acquisition related
intangibles
Conference Call
A conference call will be held today at 2:00 p.m. Pacific Time to discuss the December quarter financial results and management's outlook for the March quarter. The webcast and subsequent replay will be available in the investor relations section of the Company's web site at www.investor.xilinx.com. A telephonic replay of the call may be accessed later in the day by calling (855) 859-2056 and referencing confirmation code 6696387. The telephonic replay will be available for two weeks following the live call.
Non-GAAP Financial Information
Fiscal third quarter 2019 results and business outlook for the March quarter include financial measures which are not determined in accordance with the United States generally accepted accounting principles (GAAP), as indicated. Non-GAAP measures should not be considered as a substitute for, or superior to, financial measures determined in accordance with GAAP. The presentation of non-GAAP financial measures has been reconciled, in each case, to the most directly-comparable GAAP measure, as indicated in the accompanying tables. The Company's calculation of such non-GAAP measures may not be comparable to similarly-titled measures used by other companies.
Management uses the non-GAAP financial measures disclosed herein to evaluate the Company's financial results from continuing operations (excluding the impact of acquisitions) and compare to operating performance in past periods. Similarly, Management believes presentation of these non-GAAP measures is useful to investors because it enables investors and analysts to evaluate operating expenses of the Company's core business, excluding the impact of non-core business expenses such as acquisition-related amortization and non-recurring items.
M&A related expenses: These expenses mainly consist of legal and consulting fees associated with due diligence review of acquired companies. We believe that these costs do not reflect the Company's current operating performance. Consequently, the non-GAAP adjustments exclude these charges to facilitate an evaluation of the Company's current operating performance and comparisons to its past operating performance.
Amortization of acquisition-related intangibles: Amortization of acquisition-related intangible assets consists of amortization of intangible assets such as developed technology acquired in connection with business combinations. The non-GAAP adjustments exclude these charges to facilitate an evaluation of the Company's current operating performance and comparisons to its past operating performance.
Gains on investment related to acquisition: The Company excludes the accounting gain resulting from revaluation of its prior minority investment in DeePhi Tech. The Company believes excluding this gain will facilitate a comparable evaluation of its current operating performance to its past operating performance.
Income taxes: The Company excludes the income tax effects of non-GAAP adjustments reflected in Operating Expenses and Other Income, as detailed above. It also excludes U.S. tax reform related items. The Company believes excluding U.S. tax reform related items will facilitate a comparable evaluation of its current performance to its past performance. The fourth quarter of fiscal 2019 outlook does not reflect other tax related items which we are not able to predict without unreasonable efforts due to their inherent uncertainty.
Forward Looking Statements
This release contains forward-looking statements and projections. Forward-looking statements and projections can often be identified by the use of forward-looking words such as "expect," "believe," "may," "will," "could," "anticipate," "estimate," "continue," "plan," "intend," "project" or other similar expressions. Statements that refer to or are based on projections, uncertain events or assumptions also identify forward-looking statements. Such forward looking statements include, but are not limited to, statements related to the semiconductor market, the growth and acceptance of our products, expected revenue growth, the demand and growth in the markets we serve, opportunity for expansion into new markets, and our expectations regarding our business outlook for the March quarter. Undue reliance should not be placed on such forward-looking statements and projections, which speak only as of the date they are made. We undertake no obligation to update such forward-looking statements. Actual events and results may differ materially from those in the forward-looking statements and are subject to risks and uncertainties including customer acceptance of our new products, current global economic conditions, the health of our customers and the end markets in which they participate, our ability to forecast end customer demand, a high dependence on turns business, more customer volume discounts than expected, greater product mix changes than anticipated, fluctuations in manufacturing yields, our ability to deliver product in a timely manner, our ability to successfully manage production at multiple foundries, variability in wafer pricing, costs and liabilities associated with current and future litigation, our ability to realize the goals contemplated by our acquisitions and strategic investments, the impact of current and future legislative and regulatory changes, the impact of new accounting pronouncements and tax laws, including the U.S. Tax Cuts and Jobs Act, and interpretations thereof, and other risk factors described in our most recent Forms 10-Q and 10-K.
About Xilinx
Xilinx develops highly flexible and adaptive processing platforms that enable rapid innovation across a variety of technologies - from the endpoint to the edge to the cloud. Xilinx is the inventor of the FPGA, hardware programmable SoCs and the ACAP, designed to deliver the most dynamic processor technology in the industry and enable the adaptable, intelligent and connected world of the future. For more information, visit www.xilinx.com.
Xilinx, the Xilinx logo, Artix, ISE, Kintex, Spartan, Virtex, Zynq, Vivado, Alveo, Versal and other designated brands included herein are trademarks of Xilinx in the United States and other countries. All other trademarks are the property of their respective owners.
XLNX-F
Investor Relations Contact:
Suresh Bhaskaran
Xilinx, Inc.
(408) 879-4784
ir@xilinx.com
XILINX, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands, except per share amounts)
Three Months Ended
Nine Months Ended
---
December 29, 2018
September 29, 2018
December 30, 2017*
December 29, 2018
December 30, 2017*
---
Net revenues $800,057 $746,252 $598,603 $2,230,678 $1,828,832
Cost of revenues 247,903 231,620 177,969 686,411 554,478
Gross margin 552,154 514,632 420,634 1,544,267 1,274,354
Operating expenses:
Research and development 189,329 183,372 166,231 543,527 477,267
Selling, general and
administrative 103,039 97,685 92,753 291,256 272,981
Amortization of
acquisition-related
intangibles 1,866 839 353 3,064 1,568
Total operating expenses 294,234 281,896 259,337 837,847 751,816
Operating income 257,920 232,736 161,297 706,420 522,538
Interest and other income
(expense), net (1,330) 6,408 5,469 2,231 9,138
Income before income taxes 256,590 239,144 166,766 708,651 531,676
Provision for income taxes 17,230 23,432 179,251 63,542 213,166
Net income (loss) $239,360 $215,712 $(12,485) $645,109 $318,510
===
Net income (loss) per common share:
Basic $0.95 $0.85 $(0.05) $2.55 $1.28
===
Diluted $0.93 $0.84 $(0.05) $2.53 $1.23
===
Cash dividends per common
share $0.36 $0.36 $0.35 $1.08 $1.05
===
Shares used in per share calculations:
Basic 253,060 252,988 254,089 252,634 248,671
Diluted 256,374 255,522 254,089 255,227 258,995
* Fiscal 2018 balances have
been restated to conform to
the new revenue recognition
standard (ASC 606).
XILINX, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
December 29, 2018
March 31, 2018*
---
(unaudited)
ASSETS
Current assets:
Cash, cash equivalents and
short-term investments $3,469,652 $3,447,570
Accounts receivable, net 359,367 382,246
Inventories 283,329 236,077
Other current assets 60,004 88,695
Total current assets 4,172,352 4,154,588
Net property, plant and
equipment 317,260 304,117
Long-term investments 83,803 97,896
Other assets 781,349 503,946
Total Assets $5,354,764 $5,060,547
===
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued
liabilities $453,018 $412,759
Current portion of long-term
debt 499,851 499,186
Total current liabilities 952,869 911,945
Long-term debt 1,221,438 1,214,440
Other long-term liabilities 543,262 573,809
Stockholders' equity 2,637,195 2,360,353
Total Liabilities and
Stockholders' Equity $5,354,764 $5,060,547
===
* Fiscal 2018 balances have
been restated to conform to
the new revenue recognition
standard (ASC 606).
XILINX, INC.
SUPPLEMENTAL FINANCIAL INFORMATION
(Unaudited)
(In thousands)
Three Months Ended
Nine Months Ended
---
December 29, 2018
September 29, 2018
December 30, 2017
December 29, 2018
December 30, 2017
---
SELECTED CASH FLOW INFORMATION:
Depreciation and amortization
of other intangibles $17,974 $16,048 $11,452 $49,097 $34,416
Amortization -others 7,984 8,144 5,458 23,461 12,619
Stock-based compensation 38,641 34,945 36,801 109,194 105,209
Net cash provided by
operating activities 313,917 313,123 184,686 803,208 577,734
Purchases of property, plant
and equipment and other
intangibles 20,270 14,174 6,791 60,803 28,940
Payment of dividends to
stockholders 91,108 91,077 89,491 272,860 263,751
Repurchases of common stock 1,015 23,236 73,290 161,551 310,806
STOCK-BASED COMPENSATION INCLUDED IN:
Cost of revenues $2,366 $2,249 $2,188 $6,650 $6,486
Research and development 22,352 20,047 20,217 63,329 57,779
Selling, general and
administrative 13,923 12,649 14,396 39,215 40,944
XILINX, INC.
RECONCILIATIONS OF GAAP ACTUALS TO NON-GAAP ACTUALS
(Unaudited)
(In thousands, except per share amounts)
Three Months Ended
Nine Months Ended
---
December 29, 2018
September 29, 2018
December 30, 2017*
December 29, 2018
December 30, 2017*
---
GAAP operating
income $257,920 $232,736 $161,297 $706,420 $522,538
Acquisition-
related costs 3,208 2,206 6,909 -
Amortization of
acquisition-
related
intangibles 1,866 839 353 3,064 1,568
Non-GAAP
operating income $262,994 $235,781 $161,650 $716,393 $524,106
===
GAAP net income $239,360 $215,712 $(12,485) $645,109 $318,510
Acquisition-
related costs 3,208 2,206 6,909 -
Amortization of
acquisition-
related
intangibles 1,866 839 353 3,064 1,568
Gain from private
investments - (6,503) (6,503)
Income tax effect
of changes in
applicable U.S.
tax laws (6,949) 9,355 178,880 2,406 178,880
Income tax effect
of non-GAAP
adjustments (559) (160) (719) -
Non-GAAP net
income $236,926 $221,449 $166,748 $650,266 $498,958
===
GAAP diluted
earnings (loss)
per share $0.93 $0.84 $(0.05) $2.53 $1.23
Acquisition-
related costs 0.01 0.01 0.02 -
Amortization of
acquisition-
related
intangibles 0.01 0.01 0.01
Gain from private
investments - (0.02) (0.02)
Income tax effect
of changes in
applicable U.S.
tax laws (0.03) 0.04 0.70 0.01 0.69
Income tax effect
of non-GAAP
adjustments -
Non-GAAP diluted
EPS $0.92 $0.87 $0.65 $2.55 $1.93
===
* Fiscal 2018 balances have
been restated to conform to
the new revenue recognition
standard (ASC 606).
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SOURCE Xilinx, Inc.
