Xilinx Reports Fiscal Third Quarter 2020 Results

Xilinx Reports Fiscal Third Quarter 2020 Results Jan 28, 2020

SAN JOSE, Calif., Jan. 28, 2020 /PRNewswire/ -- Xilinx, Inc. (Nasdaq: XLNX), the leader in adaptive and intelligent computing, today announced revenues of $723 million for the third quarter of fiscal year 2020, down 13% from the prior quarter and down 10% year over year. GAAP net income for the December quarter was $162 million, or $0.64 per diluted share. Non-GAAP net income for the December quarter was $171 million, or $0.68 per diluted share.

The Xilinx Board of Directors declared a quarterly cash dividend of $0.37 per outstanding share of common stock payable on February 20, 2020 to all stockholders of record at the close of business on February 11, 2020.

Additional third quarter of fiscal year 2020 comparisons are provided in the charts below.

Q3 2020 Financial Highlights

(In millions, except EPS)

GAAP

Q3

Q2

Q3

FY 2020

FY 2020

FY 2019

Q-T-Q

Y-T-Y

Net revenues*

$723

$833

$800

-13%

-10%

Operating income

$159

$204

$258

-22%

-38%

Net income

$162

$227

$239

-29%

-32%

Diluted earnings per share

$0.64

$0.89

$0.93

-28%

-31%

Non-GAAP

Q3

Q2

Q3

FY 2020

FY 2020

FY 2019

Q-T-Q

Y-T-Y

Net revenues*

$723

$833

$800

-13%

-10%

Operating income

$174

$217

$263

-20%

-34%

Net income

$171

$240

$237

-29%

-28%

Diluted earnings per share

$0.68

$0.94

$0.92

-28%

-26%

* No adjustment between GAAP and Non-GAAP

Xilinx also announced cost-saving measures designed to drive structural operating efficiencies across the company. Xilinx expects to reduce its global workforce by approximately 7% through a targeted reduction in force and meaningfully slower hiring to replace attrition. In addition to the targeted reduction in force, Xilinx is taking other measures to reduce operating expenses, including further reducing discretionary spend and targeting additional operating efficiencies across the business. As a result of these measures, Xilinx expects to generate non-GAAP cost and operating expense savings of approximately $17M to $20M in the fourth quarter. Additionally, Xilinx expects to incur a GAAP pre-tax charge of approximately $25M to $30M in the fourth quarter of fiscal 2020 primarily related to severance pay expenses.

"As expected, our fiscal third quarter was a challenging quarter and our revenue came in near the midpoint of our guidance. Given the revenue headwinds we experienced during the quarter, we took actions to reduce our operating expenses which delivered earnings greater than our expectations.

"Fiscal fourth quarter revenue is expected to grow on a sequential basis as a result of strength in our core vertical markets and a moderate resumption of growth in our data center business. However, we are seeing greater than expected weakness in our wired and wireless business due to a slowdown in both 5G and wired infrastructure deployments, in addition to ongoing global trade headwinds.

"We expect some of these headwinds in our wired and wireless business to be persistent, resulting in revenue growth lower than our prior expectations. We are, therefore, taking several actions to further reduce our operating expenses this quarter.

"These are difficult actions, but we believe the decisive steps we are taking to reset our operating expenses will allow us to drive our growth strategy and technology roadmap while enabling a more appropriate level of operating profitability. We remain extremely focused on our mission and long-term growth opportunities as the leader in adaptable platforms from the cloud to edge to endpoints," said Victor Peng, president and chief executive officer.

Net Revenues by Geography:

Percentages

Growth Rates

Q3

Q2

Q3

FY 2020

FY 2020

FY 2019

Q-T-Q

Y-T-Y

North America

28%

28%

28%

-13%

-10%

Asia Pacific

48%

51%

46%

-19%

-6%

Europe

16%

15%

18%

-4%

-19%

Japan

8%

6%

8%

8%

-4%

Net Revenues by End Market:

Percentages

Growth Rates

Q3

Q2

Q3

FY 2020

FY 2020

FY 2019

Q-T-Q

Y-T-Y

A&D, Industrial and TME

40%

36%

40%

-5%

-10%

Automotive, Broadcast and Consumer

19%

16%

15%

2%

10%

Wired and Wireless Group

31%

38%

35%

-29%

-18%

Data Center Group

9%

10%

8%

-16%

8%

Channel

1%

0%

2%

NM

NM

Net Revenues by Product:

Percentages

Growth Rates

Q3

Q2

Q3

FY 2020

FY 2020

FY 2019

Q-T-Q

Y-T-Y

Advanced Products

70%

74%

66%

-18%

-4%

Core Products

30%

26%

34%

1%

-21%

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

FY 2020

Q2

FY 2020

Q3

FY 2019

Annual Return on Equity (%)*

31

34

34

Operating Cash Flow

$324

$224

$314

Depreciation Expense (including software amortization)

$26

$22

$18

Capital Expenditures (including software)

$34

$34

$20

Inventory Days (internal)

124

104

104

Revenue Turns (%)

39

37

40

*Return on equity calculation: Annualized year to date GAAP net income/average stockholders equity

Product and Financial Highlights Fiscal Third Quarter 2020

Advanced Products constituted approximately 70% of total revenues in the third quarter, although revenues from the category decreased 4% year over year. Zynq-based revenues grew 26% year over year despite the impact of a weaker Wireless business, further validating Xilinx platform strategy. The Zynq SoC platform, which includes Zynq at 28nm and both MPSoC and RFSoC at 16nm, represented 23% of total revenues, higher than the year ago period.

In early December, Xilinx announced that Vitis AI, its AI inference development platform was available for download. Combined with the Vitis unified software platform, Vitis AI empowers software

LINK:	https://www.xilinx.com/news/press/2020/xilinx-reports-fiscal-third-qua...
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