Xilinx Reports Record Revenue of $1.01 Billion in Fiscal Third Quarter

·17 min read
  • Record revenue of $1,011 million, representing 8% sequential growth and 26% year-over-year growth, despite ongoing industry-wide supply constraints

  • Data Center Group (DCG) achieved record revenue with sequential growth of 28% and 81% year-over-year, driven by Compute and Networking strength

  • Aerospace & Defense, Industrial and Test, Measurement & Emulation (AIT) revenue was also a record, increasing 21% sequentially and 28% year-over-year, driven by record A&D revenue and continued strength in ISM and TME end markets

  • Automotive, Broadcast and Consumer (ABC) revenue in the quarter decreased 4% sequentially coming off a record Q2 and largely in-line with expectations; revenue increased 28% year-over-year

  • Wired and Wireless Group (WWG) revenue decreased 18% sequentially and increased 1% year-over-year as supply constraints had a significant impact on business in the quarter

  • Platform transformation continues with total Adaptive SoC revenue, which includes Zynq and Versal platforms, up 5% sequentially and 30% year-over-year, and representing 28% of total revenue

SAN JOSE, Calif., January 26, 2022--(BUSINESS WIRE)--Xilinx, Inc. (Nasdaq: XLNX), the leader in adaptive computing, today announced record revenues of $1,011 million for the fiscal third quarter, up 8% over the previous quarter.

GAAP net income for the fiscal third quarter was $300 million, or $1.19 per diluted share. Non-GAAP net income for the quarter was $325 million, or $1.29 per diluted share.

As permitted by the terms of the Merger Agreement between Xilinx and Advanced Micro Devices, Inc. (AMD), the Xilinx Board of Directors voted unanimously to declare a cash dividend of $0.37 per outstanding share of common stock payable on February 14, 2022 to all stockholders of record at the close of business on February 7, 2022. The dividend is conditioned upon and will only be payable if the merger has not closed on or before the record date for such dividend.

Additional third quarter of fiscal year 2022 comparisons are provided in the charts below.

Q3 Fiscal 2022 Financial Highlights

(In millions, except EPS)

GAAP

Q3

Q2

Q3

FY2022

FY2022

FY2021

Q-T-Q

Y-T-Y

Net revenues*

$1,011

$936

$803

8%

26%

Gross margin

$726

$632

$547

15%

33%

Operating income

$310

$250

$172

24%

80%

Net income

$300

$235

$171

28%

76%

Diluted earnings per share

$1.19

$0.94

$0.69

27%

73%

Non-GAAP

Q3

Q2

Q3

FY2022

FY2022

FY2021

Q-T-Q

Y-T-Y

Net revenues*

$1,011

$936

$803

8%

26%

Gross margin

$736

$644

$554

14%

33%

Operating income

$340

$288

$201

18%

69%

Net income

$325

$266

$194

22%

67%

Diluted earnings per share

$1.29

$1.06

$0.78

22%

65%

* No adjustment between GAAP and Non-GAAP

Note: Q3 and Q2 FY2022 consisted of 13 weeks; Q3 FY2021 consisted of 14 weeks

"Xilinx achieved another record quarter and surpassed $1 billion in quarterly sales for the first time in the company’s history," said Victor Peng, Xilinx president and CEO. "While we were unable to fully satisfy customer needs, our results demonstrate our team’s relentless focus and execution in supporting our customers as well as possible given the extremely tight supply conditions.

"We saw broad and robust demand across our end markets with record quarters in our DCG business as well as our A&D end market. A&D record performance, combined with strong ISM and TME performance, also led to a record for total AIT, and drove stronger overall profitability. The strength in our business clearly demonstrates the successful execution of our strategy."

"Record Q3 revenue was driven primarily from sequential growth in A&D, DCG and TME, leading to total sequential revenue growth of 8% and year-over-year growth of 26%, the fifth consecutive quarter of double-digit year-over-year growth," said Brice Hill, Xilinx CFO. "Overall strong revenues and business mix, in addition to positive impacts from strategic venture investments, drove record earnings this quarter. Our platform strategy continues to progress as Adaptive SoC revenue grew 5% sequentially and 30% year-over-year, representing 28% of total revenue.

"We saw strong free cash flow this quarter of $351 million, or 35% of revenue, reflecting our efficient cash generating business model. Please note, the increase in inventory to 106 days is primarily driven by supply cost increases and does not reflect a significant increase in unit inventory."

Net Revenues by Geography:

Percentages

Growth Rates

Q3

Q2

Q3

FY2022

FY2022

FY2021

Q-T-Q

Y-T-Y

North America

33%

26%

30%

40%

43%

Asia Pacific

40%

48%

44%

-10%

13%

Europe

18%

16%

19%

16%

18%

Japan

9%

10%

7%

-1%

53%

Net Revenues by End Market:

Percentages

Growth Rates

Q3

Q2

Q3

FY2022

FY2022

FY2021

Q-T-Q

Y-T-Y

A&D, Industrial and TME

46%

40%

45%

21%

28%

Automotive, Broadcast and Consumer

19%

22%

19%

-4%

28%

Wired and Wireless Group

23%

31%

29%

-18%

1%

Data Center Group

11%

9%

7%

28%

81%

Channel

1%

-2%

0%

NM

NM

Net Revenues by Product:

Percentages

Growth Rates

Q3

Q2

Q3

FY2022

FY2022

FY2021

Q-T-Q

Y-T-Y

Advanced Products

78%

74%

72%

14%

35%

Core Products

22%

26%

28%

-8%

3%

Products are classified as follows:

Advanced Products: Versal, UltraScale+, UltraScale and 7-series product families, and production boards business composed of Alveo, Solarflare, Network, and System-On-Modules.

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

FY2022

FY2022

FY2021

Operating Cash Flow

$362

$122

$360

Depreciation Expense (including software amortization)

$30

$31

$31

Capital Expenditures (including software)

$11

$15

$6

Free Cash Flow (1)

$351

$107

$354

Inventory Days (internal)

106

86

115

Revenue Turns (%)

32

23

34

  1. Free Cash Flow = Operating Cash Flow - Capital Expenditures (including software)

Product and Financial Highlights - Fiscal Third Quarter 2022

  • Xilinx introduced the Alveo U55C data center accelerator card and a new standards-based, API-driven clustering solution for deploying FPGAs at massive scale. The Alveo U55C accelerator brings superior performance-per-watt to high performance computing (HPC) and database workloads and easily scales through the Xilinx HPC clustering solution. Initial customers include Ansys and TigerGraph.

  • Xilinx announced it is working with its IP and system integrator ecosystem to provide the industry’s first and only production-ready multimedia streaming endpoint solutions for broadcast and professional audio/video (AV) applications. The highly integrated solutions are ready-to-ship, or ready to customize, making it significantly faster and easier for customers to bring broadcast and professional AV products to market.

  • Xilinx and autonomous driving collaboration partner Motovis powered a demonstration of Omnivision’s 8 megapixel (MP)-based forward looking automotive camera system, an industry first. The live proof-of-concept demonstration highlighted the increased range and wider field of view enabled in the higher resolution 8MP system.

  • The recently announced Zynq RFSoC DFE and the T1 Telco Accelerator Card, key products for the Wired and Wireless end markets, are now in production with strong interest in both products and significant deployments for RFSoC DFE.

Commentary on AMD Transaction

As announced on October 27, 2020, Advanced Micro Devices, Inc. (AMD) intends to acquire Xilinx in an all-stock transaction. Due to the pending acquisition, Xilinx will not hold an earnings conference call or provide forward-looking guidance. As permitted by the terms of the Merger Agreement between Xilinx and AMD, the Xilinx Board of Directors has declared a cash dividend of $0.37 per outstanding share of common stock. The dividend is conditioned upon and will only be payable if the merger has not closed on or before the record date for such dividend. Xilinx’s stock repurchase program remains suspended. As previously announced, the parties believe that the transaction will close in the first quarter of 2022.

Non-GAAP Financial Information

Fiscal third quarter 2022 results 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. Xilinx’s (the Company) 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, other than free cash flow, 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, as described below:

M&A related expenses: These expenses mainly consist of legal, advisory and consulting fees associated with acquisition activities, and also include fees and retention compensation related to the Company’s acquisition by AMD. The Company believes these costs do not reflect its current 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.

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 other significant tax effects of post-acquisition tax integration transactions. The Company believes excluding post-acquisition tax integration items will facilitate a comparable evaluation of its current performance to its past performance.

In addition, free cash flow, which is cash flow from operations adjusted to exclude additions to software, property, plant, and equipment, is used by management when assessing the Company’s sources of liquidity, capital resources, and quality of earnings. The Company believes that this non-GAAP financial measure is helpful in understanding the Company’s capital requirements and provides an additional means to evaluate the cash flow trends of the Company’s business.

Forward-Looking Statements

This release contains forward-looking statements, which 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 uncertain events or assumptions also identify forward-looking statements. Such forward-looking statements include, but are not limited to, statements related to our proposed acquisition by AMD, the semiconductor market, the growth and acceptance of our products, expected revenue growth, the demand and growth in the markets we serve, and opportunity for expansion into new markets. Undue reliance should not be placed on such forward-looking statements, 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 ongoing COVID-19 pandemic and related mitigation 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); closing of the proposed transaction with AMD on anticipated timing (including the risk that the conditions to the transaction are not satisfied on a timely basis or at all or the failure of the transaction to close for any other reason) and terms (including obtaining the anticipated tax treatment, regulatory approvals, required consents or authorizations); unanticipated difficulties or expenditures relating to the transaction; the response of business partners and retention as a result of the announcement and pendency of the transaction; the diversion of management time on transaction-related matters; customer acceptance of our new products; changing 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; our reliance on third parties (including distributors); variability in wafer pricing; costs and liabilities associated with current and future litigation (including litigation relating to the proposed transaction with AMD); 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 and subsequent filings with the U.S. Securities and Exchange Commission.

About Xilinx

Xilinx, Inc. develops highly flexible and adaptive computing platforms that enable rapid innovation across a variety of technologies - from the cloud, to the edge, to the endpoint. Xilinx is the inventor of the FPGA and Adaptive SoCs (including our Adaptive Compute Acceleration Platform, or ACAP), designed to deliver the most dynamic computing technology in the industry. We collaborate with our customers to create scalable, differentiated and intelligent solutions that enable the adaptable, intelligent and connected world of the future. For more information, visit xilinx.com.

Xilinx, the Xilinx logo, Alveo, Artix, Kintex, Spartan, Versal, Vitis, Virtex, Vivado, Zynq, Kria and other designated brands included herein are trademarks of Xilinx in the United States and/or other countries. All other trademarks are the property of their respective owners.

XILINX, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(In thousands, except per share amounts)

Three Months Ended

Nine Months Ended

January 1, 2022

October 2, 2021

January 2, 2021

January 1, 2022

January 2, 2021

Net revenues

$

1,011,059

$

935,770

$

803,404

$

2,825,434

$

2,296,612

Cost of revenues:

Cost of products sold

275,479

293,327

249,529

852,247

693,753

Amortization of acquisition-related intangibles

10,059

10,150

6,875

29,275

20,268

Total cost of revenues

285,538

303,477

256,404

881,522

714,021

Gross margin

725,521

632,293

547,000

1,943,912

1,582,591

Operating expenses:

Research and development

287,969

253,881

235,018

789,824

664,776

Selling, general and administrative

125,438

126,319

136,701

376,678

355,877

Amortization of acquisition-related intangibles

2,000

2,252

2,856

7,093

8,581

Total operating expenses

415,407

382,452

374,575

1,173,595

1,029,234

Operating income

310,114

249,841

172,425

770,317

553,357

Interest and other income (expense), net

25,260

(9,204

)

3,709

17,057

(19,215

)

Income before income taxes

335,374

240,637

176,134

787,374

534,142

Provision for income taxes

35,312

6,092

5,162

46,426

75,517

Net income

$

300,062

$

234,545

$

170,972

$

740,949

$

458,625

Net income per common share:

Basic

$

1.21

$

0.95

$

0.70

$

3.00

$

1.88

Diluted

$

1.19

$

0.94

$

0.69

$

2.96

$

1.86

Cash dividends per common share

$

0.37

$

-

$

0.38

$

0.37

$

1.14

Shares used in per share calculations:

Basic

248,003

247,765

245,145

246,744

243,976

Diluted

251,971

250,457

248,148

250,448

246,786

XILINX, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

January 1, 2022

April 03, 2021*

(unaudited)

ASSETS

Current assets:

Cash, cash equivalents and short-term investments

$

3,702,041

$

3,078,899

Accounts receivable, net

439,397

285,214

Inventories

331,071

311,085

Other current assets

57,352

71,064

Total current assets

4,529,861

3,746,262

Net property, plant and equipment

328,202

345,023

Other assets

1,487,378

1,427,916

Total Assets

$

6,345,441

$

5,519,201

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable and accrued liabilities

$

135,382

$

116,046

Accrued and other liabilities

549,095

508,509

Total current liabilities

684,477

624,555

Long-term debt

1,493,623

1,492,688

Other long-term liabilities

493,031

514,997

Stockholders' equity

3,674,310

2,886,961

Total Liabilities and Stockholders' Equity

$

6,345,441

$

5,519,201

* Fiscal 2021 balances are derived from audited financial statements.

XILINX, INC.

SUPPLEMENTAL FINANCIAL INFORMATION

(Unaudited)

(In thousands)

Three Months Ended

Nine Months Ended

January 1, 2022

October 2, 2021

January 2, 2021

January 1, 2022

January 2, 2021

SELECTED CASH FLOW INFORMATION:

Depreciation and amortization of software

$

30,407

$

30,908

$

30,818

$

93,507

$

92,816

Amortization - others

17,821

18,565

17,133

54,332

47,508

Stock-based compensation

73,442

69,720

66,331

210,771

175,153

Net cash provided by operating activities

362,263

122,117

360,137

874,277

853,191

Purchases of property, plant and equipment and software

11,429

14,959

6,009

43,574

36,801

Payment of dividends to stockholders

91,716

-

93,155

91,716

278,674

Repurchases of common stock

-

-

-

-

53,682

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

(154

)

59,344

4,560

63,295

37,871

STOCK-BASED COMPENSATION INCLUDED IN:

Cost of revenues

$

3,829

$

3,797

$

3,465

$

11,236

$

9,149

Research and development

45,323

42,273

40,228

129,057

106,707

Selling, general and administrative

24,290

23,650

22,638

70,478

59,297

XILINX, INC.

RECONCILIATIONS OF GAAP ACTUALS TO NON-GAAP ACTUALS

(Unaudited)

(In thousands, except per share amounts)

Three Months Ended

Nine Months Ended

January 1, 2022

October 2, 2021

January 2, 2021

January 1, 2022

January 2, 2021

GAAP gross margin

$

725,521

$

632,293

$

547,000

$

1,943,912

$

1,582,591

M&A related expenses

754

1,249

114

2,936

114

Amortization of acquisition-related intangibles

10,059

10,150

6,875

29,275

20,268

Non-GAAP gross margin

$

736,334

$

643,692

$

553,989

$

1,976,123

$

1,602,973

GAAP operating income

$

310,114

$

249,841

$

172,425

$

770,317

$

553,357

Amortization of acquisition-related intangibles

12,059

12,402

9,731

36,368

28,849

M&A related expenses

17,721

25,905

19,150

67,384

22,219

Non-GAAP operating income

$

339,894

$

288,148

$

201,306

$

874,069

$

604,425

GAAP net income

$

300,062

234,545

$

170,972

$

740,948

$

458,625

Amortization of acquisition-related intangibles

12,059

12,402

9,731

36,368

28,849

M&A related expenses

17,721

25,905

19,150

67,384

22,219

Income tax effect of tax-related items

-

-

(528

)

-

56,273

Income tax effect of non-GAAP adjustments

(5,341

)

(7,021

)

(5,100

)

(18,621

)

(8,160

)

Non-GAAP net income

$

324,501

$

265,831

$

194,225

$

826,079

$

557,806

GAAP diluted EPS

$

1.19

$

0.94

$

0.69

$

2.96

$

1.86

Amortization of acquisition-related intangibles

0.05

0.05

0.04

0.15

0.12

Acquisition-related costs

0.07

0.10

0.07

0.26

0.08

Income tax effect of tax-related items

-

-

-

-

0.23

Income tax effect of non-GAAP adjustments

(0.02

)

(0.03

)

(0.02

)

(0.07

)

(0.03

)

Non-GAAP diluted EPS

$

1.29

$

1.06

$

0.78

$

3.30

$

2.26

GAAP cash flow from operations

$

362,263

$

122,117

$

360,137

$

874,277

$

853,191

Capital expenditures (including software)

(11,429

)

(14,959

)

(6,009

)

(43,574

)

(36,801

)

Free cash flow

$

350,834

$

107,158

$

354,128

$

830,703

$

816,390

XLNX-F
Source: Xilinx Newsroom
Category: Corporate Announcements

View source version on businesswire.com: https://www.businesswire.com/news/home/20220126005770/en/

Contacts

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

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