Xilinx Reports Fiscal Fourth Quarter and Fiscal Year 2020 Results

Apr 22, 2020

SAN JOSE, Calif.--(BUSINESS WIRE)-- Xilinx, Inc. (Nasdaq: XLNX), the leader in adaptive and intelligent computing, today announced revenues of $3.16 billion for fiscal year 2020, up 3% from the prior fiscal year. Revenues were $756 million for the fourth quarter of fiscal year 2020, up 5% from the prior quarter and down 9% year over year.

GAAP net income for fiscal year 2020 was $793 million, or $3.11 per diluted share. Non-GAAP net income for fiscal year 2020 was $853 million, or $3.35 per diluted share. GAAP net income for the March quarter was $162 million, or $0.65 per diluted share. Non-GAAP net income for the March quarter was $193 million, or $0.78 per diluted share.

The Xilinx Board of Directors declared a quarterly cash dividend of $0.38 per outstanding share of common stock payable on June 3, 2020 to all stockholders of record at the close of business on May 13, 2020. The declared dividend represents a 2.7% increase over the prior quarter’s dividend and reflects Xilinx’s commitment to growing the dividend.

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

Q4 2020 Financial Highlights

(In millions, except EPS)

 

 

GAAP

 

 

 

 

 

 

 

 

Q4

Q3

Q4

 

 

 

 

FY2020

FY2020

FY2019

 

Q-T-Q

Y-T-Y

Net revenues*

$756

$723

$828

 

5%

-9%

Operating income

$178

$159

$250

 

12%

-29%

Net income

$162

$162

$245

 

0%

-34%

Diluted earnings per share

$0.65

$0.64

$0.95

 

2%

-32%

 

 

 

 

 

 

 

 

Non-GAAP

 

 

 

 

 

 

 

 

Q4

Q3

Q4

 

 

 

 

FY2020

FY2020

FY2019

 

Q-T-Q

Y-T-Y

Net revenues*

$756

$723

$828

 

5%

-9%

Operating income

$218

$174

$259

 

25%

-16%

Net income

$193

$171

$242

 

13%

-20%

Diluted earnings per share

$0.78

$0.68

$0.94

 

15%

-17%

 

 

* No adjustment between GAAP and Non-GAAP

“Despite our fiscal 2020 being uniquely challenging, particularly related to the US trade-related restrictions with Huawei as well as some COVID-19 impact during our Q4, we were able to deliver another record year with revenue of $3.16 billion, a 3% increase over fiscal 2019,” said Xilinx president and CEO Victor Peng. “The strength and diversity of our business were reflected in the results of our fiscal fourth quarter with strong sequential growth in both revenue and profitability.”

“There remains a high degree of uncertainty in the global business environment given the impact of COVID-19 which creates challenges with visibility beyond the near term. Therefore, we believe it is prudent to provide only quarterly guidance at this time. We will continue to closely monitor business conditions. Lastly, I want to thank our employees for their continued focus and commitment in these challenging times.”

Net Revenues by Geography:

 

 

 

 

 

 

 

Percentages

 

Growth Rates

 

Q4

Q3

Q4

 

 

 

 

FY2020

FY2020

FY2019

 

Q-T-Q

Y-T-Y

North America

37%

28%

27%

 

37%

27%

Asia Pacific

37%

48%

47%

 

-19%

-28%

Europe

18%

16%

18%

 

17%

-11%

Japan

8%

8%

8%

 

7%

-4%

 

 

 

 

 

 

 

Net Revenues by End Market:

 

 

 

 

 

 

 

Percentages

 

Growth Rates

 

Q4

Q3

Q4

 

 

 

 

FY2020

FY2020

FY2019

 

Q-T-Q

Y-T-Y

A&D, Industrial and TME

50%

40%

39%

 

30%

15%

Automotive, Broadcast and Consumer

16%

19%

14%

 

-13%

2%

Wired and Wireless Group

24%

31%

42%

 

-19%

-46%

Data Center Group

10%

9%

5%

 

14%

77%

Channel

0%

1%

0%

 

NM

NM

 

 

 

 

 

 

 

Net Revenues by Product:

 

 

 

 

 

 

 

Percentages

 

Growth Rates

 

Q4

Q3

Q4

 

 

 

 

FY2020

FY2020

FY2019

 

Q-T-Q

Y-T-Y

Advanced Products

70%

70%

68%

 

5%

-6%

Core Products

30%

30%

32%

 

3%

-14%

Products are classified as follows:

Advanced Products: Alveo and related products, 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)

 

 

Q4

Q3

Q4

 

FY2020

FY2020

FY2019

 

 

 

 

Annual Return on Equity (%)*

31

31

34

 

 

 

 

Operating Cash Flow

$345

$324

$288

 

 

 

 

Depreciation Expense (including software amortization)

$29

$26

$22

 

 

 

 

Capital Expenditures (including software)

$32

$34

$28

 

 

 

 

Inventory Days (internal)

122

124

107

 

 

 

 

Revenue Turns (%)

46

39

35

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

Product and Financial Highlights - Fiscal Year 2020

  • The Data Center Group (DCG) delivered 22% revenue growth over fiscal 2019 driven by increased adoption with hyperscale customers across compute, networking and storage workloads. Pipeline for new opportunities in compute continues to show strong growth for video, HPC, database and fintech. Leveraging the Solarflare acquisition, Xilinx shipped Alveo U25 SmartNIC, the first internally developed SmartNIC solution, in the fiscal fourth quarter and is being evaluated by multiple customers. SmartSSD is also gaining traction with Tier-1 and Tier-2 hyperscale customers. Xilinx now has over 10,000 developers trained on Xilinx software tools, including Vitis, nearly 1,000 ISV partners and over 130 applications published for Alveo.
  • The Wired and Wireless Group (WWG) delivered relatively flat revenues, down 1% vs. fiscal 2019, despite facing a highly challenging business environment related to trade restrictions and an industry slowdown in the ramp of 5G. Xilinx continues to maintain strong engagements with global OEMs across a variety of deployments and applications. Xilinx recently announced a strategic engagement with Samsung on a second generation 5G radio design that includes beamforming technology leveraging the 7 nm Versal platform. Adoption of Xilinx’s RFSoC products also continues to ramp with key wins for DFE applications as well as for O-RAN deployments, as recently announced with Telefónica.
  • Revenues from Core Markets Group grew 6% year over year, showing the strength and stability of Xilinx’s broad and robust end markets. Aerospace & Defense, Industrial and Test & Measurement (AIT) revenue grew 5% annually, driven by solid Aerospace & Defense performance. Automotive, Broadcast and Consumer (ABC) markets delivered 8% annual growth, with strength seen in all end markets despite headwinds in fiscal fourth quarter from COVID-19 impacts. Zynq adoption remains strong in Automotive markets with broad utilization in ADAS and infotainment applications.
  • Xilinx is committed to doing its part in fighting the COVID-19 pandemic. Xilinx has been working to support some of the largest medical suppliers in the world, such as Mindray and GE Healthcare, to supply critical technology to test and treat COVID-19, including helping to power ventilators, patient monitors, respirators and patient ICU beds. In addition, earlier this month, Xilinx donated $1.1 million for COVID-19 relief to various global and local health organizations including the World Health Organization (WHO) Solidarity Response Fund, The University of California, San Francisco (UCSF) COVID-19 Response Fund and the Silicon Valley Strong Fund. Xilinx is also matching employee contributions to various relief efforts.
  • During fiscal year 2020, Xilinx returned approximately $1.58 billion to shareholders. This included $1.21 billion through share repurchases at an average price of $93.73 per share and $372 million through dividends.

Business Outlook - Fiscal First Quarter 2021

The following guidance is based on current expectations and estimates, and as indicated, is presented on a GAAP and non-GAAP basis. This guidance is forward-looking and actual results may differ materially, as a result of, among other things, the important factors discussed and referred to at the end of this release.

 

 

Non-GAAP

 

 

GAAP

Adjustments

Non-GAAP

Revenues

$660M - $720M

$660M - $720M

Gross Margin

67% - 69%

~ 1% (1)

68% - 70%

Operating Expenses

$312M - $316M

$5M (2)

$307M - $311M

Other Expense

~$13M

~$13M

Tax Rate

8%-10%

~ 1% (3)

9%-11%

Notes regarding Non-GAAP Adjustments:

 

(1)

Amortization of acquisition-related intangibles

 

(2)

M&A related expenses and amortization of acquisition-related intangibles

 

(3)

Income tax effect of Non-GAAP adjustments

Conference Call

A conference call will be held today at 2:00 p.m. Pacific Time to discuss the year-end and March quarter financial results and management's outlook for the June quarter. The webcast and subsequent replay will be available in the investor relations section of the Company's web site at 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 8889854. The telephonic replay will be available for two weeks following the live call.

Non-GAAP Financial Information

Fiscal year 2020 and fourth quarter 2020 results and business outlook for the June 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 acquisition activities. The Company believes these costs do not reflect its 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.

Inventory valuation adjustment: Business combination accounting principles require the Company to measure acquired inventory at fair value. The fair value of inventory reflects the acquired company’s cost of manufacturing plus a portion of the expected profit margin. The non-GAAP adjustment to the Company’s cost of revenues excludes the expected profit margin component that is recorded under business combination accounting principles associated with the Company’s acquisitions. The Company believes the adjustment is useful to investors as an additional means to reflect cost of revenues and gross margin trends of its business.

Gain 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 and other significant tax effects of post-acquisition tax integration transactions. The Company believes excluding U.S. tax reform and post-acquisition tax integration items will facilitate a comparable evaluation of its current performance to its past performance. The fourth quarter of fiscal 2020 outlook does not reflect other tax related items which the Company is not able to predict without unreasonable efforts due to their inherent uncertainty.

Severance-related expenses: These expenses primarily consist of severance-related pay and benefits in connection with the targeted reduction in force. The Company believes excluding these charges will facilitate a comparable evaluation of its current operating performance to its past and future performance.

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 June 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, among others, the impact of the COVID-19 pandemic and related containment measures (which, in addition to presenting its own risks and uncertainties, may also heighten the other risks and uncertainties faced by our business and decrease our visibility into all aspects of our business), customer acceptance of our new products, current global economic conditions, our dependence on certain customers, trade and export restrictions, the condition and performance 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 generate cost and operating expense savings in an efficient and timely manner, 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, Alveo, Artix, Kintex, Spartan, Versal, Vitis, Virtex, Vivado, Zynq, 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

XILINX, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands, except per share amounts)
Three Months Ended Twelve Months Ended
March 28, 2020 December 28, 2019 March 30, 2019 March 28, 2020 March 30, 2019
Net revenues

$

756,169

$

723,499

$

828,361

$

3,162,666

$

3,059,040

Cost of revenues:
Cost of products sold

 

221,037

 

233,324

 

269,457

 

1,025,234

 

955,868

Amortization of acquisition-related intangibles

 

6,697

 

6,697

 

-

 

22,396

 

-

Total cost of revenues

 

227,734

 

240,021

 

269,457

 

1,047,630

 

955,868

Gross margin

 

528,435

 

483,478

 

558,904

 

2,115,036

 

2,103,172

Operating expenses:
Research and development

 

214,968

 

211,541

 

199,500

 

853,589

 

743,027

Selling, general and administrative

 

103,675

 

109,612

 

107,160

 

432,308

 

398,416

Amortization of acquisition-related intangibles

 

3,401

 

2,919

 

1,866

 

8,889

 

4,930

Restructuring charges

 

28,362

 

-

 

-

 

28,362

 

-

Total operating expenses

 

350,406

 

324,072

 

308,526

 

1,323,148

 

1,146,373

Operating income

 

178,029

 

159,406

 

250,378

 

791,888

 

956,799

Interest and other income (expense), net

 

11,717

 

6,437

 

9,302

 

42,096

 

11,533

Income before income taxes

 

189,746

 

165,843

 

259,680

 

833,984

 

968,332

Provision for income taxes

 

27,489

 

3,831

 

15,040

 

41,263

 

78,582

Net income

$

162,257

 

162,012

$

244,640

$

792,721

$

889,750

Net income per common share:
Basic

$

0.66

$

0.65

$

0.96

$

3.15

$

3.52

Diluted

$

0.65

$

0.64

$

0.95

$

3.11

$

3.47

Cash dividends per common share

$

0.37

$

0.37

$

0.36

$

1.48

$

1.44

Shares used in per share calculations:
Basic

 

247,166

 

250,546

 

253,855

 

251,732

 

252,762

Diluted

 

249,320

 

252,808

 

258,177

 

254,943

 

256,434

XILINX, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
March 28, 2020 March 30, 2019*
(unaudited)
ASSETS
Current assets:
Cash, cash equivalents and short-term investments

$

2,267,216

$

3,175,684

Accounts receivable, net

 

273,028

 

335,165

Inventories

 

304,340

 

315,358

Other current assets

 

64,557

 

65,771

Total current assets

 

2,909,141

 

3,891,978

Net property, plant and equipment

 

372,574

 

328,929

Long-term investments

 

-

 

53,433

Other assets

 

1,411,619

 

877,008

Total assets

$

4,693,334

$

5,151,348

 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities

$

586,421

$

475,036

Current portion of long-term debt

 

499,260

 

-

Total current liabilities

 

1,085,681

 

475,036

Long-term debt

 

747,110

 

1,234,807

Other long-term liabilities

 

545,494

 

579,996

Stockholders' equity

 

2,315,049

 

2,861,509

Total Liabilities and Stockholders' Equity

$

4,693,334

$

5,151,348

 
*Fiscal 2019 balances are derived from audited financial statements.
XILINX, INC.
SUPPLEMENTAL FINANCIAL INFORMATION
(Unaudited)
(In thousands)
Three Months Ended Twelve Months Ended
March 28, 2020 December 28, 2019 March 30, 2019 March 28, 2020 March 30, 2019
SELECTED CASH FLOW INFORMATION:

Depreciation and amortization of software

$

28,603

$

26,331

$

21,607

$

97,485

$

70,704

Amortization - others

 

16,282

 

17,257

 

10,195

 

60,048

 

33,656

Stock-based compensation

 

43,991

 

50,157

 

38,748

 

186,723

 

147,942

Net cash provided by operating activities

 

345,351

 

323,575

 

288,007

 

1,190,836

 

1,091,215

Purchases of property, plant, equipment and software

 

32,309

 

34,138

 

28,242

 

129,289

 

89,045

Payment of dividends to stockholders

 

91,417

 

92,931

 

91,384

 

371,793

 

364,244

Repayment of debt

 

-

 

-

 

500,000

 

-

 

500,000

Repurchases of common stock

 

470,733

 

260,939

 

-

 

1,208,917

 

161,551

Taxes paid related to net share settlement of restricted stock units, net of proceeds from issuance of common stock

 

(28,082)

 

3,565

 

(23,927)

 

27,459

 

(334)

 
STOCK-BASED COMPENSATION INCLUDED IN:
Cost of revenues

$

1,649

$

2,961

$

2,170

$

10,035

$

8,820

Research and development

 

28,857

 

31,543

 

23,099

 

114,976

 

86,428

Selling, general and administrative

 

13,313

 

15,653

 

13,479

 

61,540

 

52,694

Restructuring charges

 

172

 

-

 

-

 

172

 

-

XILINX, INC.
RECONCILIATIONS OF GAAP ACTUALS TO NON-GAAP ACTUALS
(Unaudited)
(In thousands, except per share amounts)
Three Months Ended Twelve Months Ended
March 28, 2020 December 28, 2019 March 30, 2019 March 28, 2020 March 30, 2019
GAAP gross margin

$

528,435

$

483,478

$

558,904

$

2,115,036

$

2,103,172

Inventory valuation adjustment

 

-

 

2,114

 

-

 

3,855

 

-

Amortization of acquisition-related intangibles

 

6,697

 

6,697

 

-

 

22,396

 

-

Non-GAAP gross margin

$

535,132

$

492,289

$

558,904

$

2,141,287

$

2,103,172

 
GAAP operating income

$

178,029

$

159,406

$

250,378

$

791,888

$

956,799

Inventory valuation adjustment

 

-

 

2,114

 

-

 

3,855

 

-

Amortization of acquisition-related intangibles

 

10,098

 

9,616

 

1,866

 

31,285

 

4,930

Acquisition-related costs

 

1,798

 

3,042

 

6,560

 

14,190

 

13,469

Restructuring charges

 

28,362

 

-

 

-

 

28,362

 

-

Non-GAAP operating income

$

218,287

$

174,178

$

258,804

$

869,580

$

975,198

 
GAAP net income

$

162,257

$

162,012

$

244,640

$

792,721

$

889,750

Inventory valuation adjustment

 

-

 

2,114

 

-

 

3,855

 

-

Amortization of acquisition-related intangibles

 

10,098

 

9,616

 

1,866

 

31,285

 

4,930

Acquisition-related costs

 

1,798

 

3,042

 

6,560

 

14,190

 

13,469

Restructuring charges

 

28,362

 

-

 

-

 

28,362

 

-

Gain on investment related to acquisition

 

-

 

-

 

-

 

-

 

(6,503)

Income tax effect of changes in applicable U.S. tax laws

 

-

 

-

 

(8,508)

 

-

 

(6,100)

Income tax effect of intercompany integration transactions

 

-

 

(3,697)

 

-

 

(1,838)

 

-

Income tax effect of non-GAAP adjustments

 

(9,137)

 

(2,316)

 

(2,330)

 

(15,271)

 

(3,050)

Non-GAAP net income

$

193,378

$

170,771

$

242,228

$

853,304

$

892,496

 
GAAP diluted EPS

$

0.65

$

0.64

$

0.95

$

3.11

$

3.47

Inventory valuation adjustment

 

-

 

0.01

 

-

 

0.02

 

-

Amortization of acquisition-related intangibles

 

0.04

 

0.04

 

0.01

 

0.11

 

0.02

Acquisition-related costs

 

0.01

 

0.01

 

0.02

 

0.06

 

0.05

Restructuring charges

 

0.12

 

-

 

-

 

0.12

 

-

Gain on investment related to acquisition

 

-

 

-

 

-

 

-

 

(0.03)

Income tax effect of changes in applicable U.S. tax laws

 

-

 

-

 

(0.03)

 

-

 

(0.02)

Income tax effect of intercompany integration transactions

 

-

 

(0.01)

 

-

 

(0.01)

 

-

Income tax effect of non-GAAP adjustments

 

(0.04)

 

(0.01)

 

(0.01)

 

(0.06)

 

(0.01)

Non-GAAP diluted EPS

$

0.78

$

0.68

$

0.94

$

3.35

$

3.48

Source: Xilinx Newsroom
Category: Corporate Announcements

Investor Relations Contact:
Suresh Bhaskaran
Xilinx, Inc.
(408) 879-4784
ir@xilinx.com

Source: Xilinx, Inc.