Business Wire | Jan 27, 2021 04:20PM EST

Xilinx Reports Third Quarter Fiscal Year 2021 Results

Jan. 27, 2021

SAN JOSE, Calif.--(BUSINESS WIRE)--Jan. 27, 2021--Xilinx, Inc. (Nasdaq: XLNX), the leader in adaptive computing, today announced revenues of $803 million for the third quarter of fiscal year 2021.

GAAP net income for the quarter was $171 million, or $0.69 per diluted share. Non-GAAP net income was $194 million, or $0.78 per diluted share.

Additional third quarter of fiscal year 2021 comparisons are provided in the charts below.

Q3 Fiscal 2021 Financial Highlights

(In millions, except EPS)

GAAP



Q3 Q2 Q3

FY2021 FY2021 FY2020 Q-T-Q Y-T-Y

Net revenues* $803 $767 $723 5% 11%

Gross margin $547 $542 $483 1% 13%

Operating income $172 $205 $159 -16% 8%

Net income $171 $194 $162 -12% 6%

Diluted earnings per share $0.69 $0.79 $0.64 -13% 8%



Non-GAAP



Q3 Q2 Q3

FY2021 FY2021 FY2020 Q-T-Q Y-T-Y

Net revenues* $803 $767 $723 5% 11%

Gross margin $554 $548 $492 1% 13%

Operating income $201 $216 $174 -7% 16%

Net income $194 $203 $171 -5% 14%

Diluted earnings per share $0.78 $0.82 $0.68 -5% 15%



* No adjustment between GAAP and Non-GAAP

"Third quarter revenues exceeded the high end of our guidance, delivering both sequential and annual growth, demonstrating strengthening business conditions and solid execution," said Victor Peng, Xilinx president and CEO. "Our Wired and Wireless Group performed better than expected as 5G deployments ramped more meaningfully in North America. We achieved a record quarter in Automotive, Broadcast and Consumer end markets, driven by the ongoing economic recovery, as demand for automobiles strengthened and live media events returned. In addition, as expected, our first 7nm Versal ACAP has gone into production with a leading wireless OEM. We are excited to see the Versal product portfolio begin to contribute to Xilinx's long-term growth."

"Our investments continue to deliver strong returns, with our Advanced Products growing 8% sequentially and representing 72% of total revenue," said Brice Hill, Xilinx CFO. "We continue to drive our transformation to a platform company as demonstrated by our Zynq platform product revenue growing 24% sequentially, making up 27% of total revenue during the quarter. Our efficient financial model generated significant free cash flow of $354 million, or 44% of Q3 revenue."

Net Revenues by Geography:

Percentages Growth Rates

Q3 Q2 Q3

FY2021 FY2021 FY2020 Q-T-Q Y-T-Y

North America 30% 29% 28% 6% 16%

Asia Pacific 44% 48% 48% -3% 4%

Europe 19% 18% 16% 12% 28%

Japan 7% 5% 8% 44% 2%



Net Revenues by End Market:

Percentages Growth Rates

Q3 Q2 Q3

FY2021 FY2021 FY2020 Q-T-Q Y-T-Y

A&D, Industrial and TME 45% 44% 40% 7% 25%

Automotive, Broadcast and Consumer 19% 16% 19% 27% 14%

Wired and Wireless Group 29% 26% 31% 14% 2%

Data Center Group 7% 14% 9% -45% -15%

Channel 0% 0% 1% NM NM



Net Revenues by Product:

Percentages Growth Rates

Q3 Q2 Q3

FY2021 FY2021 FY2020 Q-T-Q Y-T-Y

Advanced Products 72% 70% 70% 8% 15%

Core Products 28% 30% 30% -3% 1%

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)



Q3 Q2 Q3

FY2021 FY2021 FY2020



Operating Cash Flow $360 $248 $324

Depreciation Expense (including software amortization) $31 $30 $26

Capital Expenditures (including software) $6 $15 $34

Free Cash Flow (1) $354 $232 $289

Inventory Days (internal) 115 114 124

Revenue Turns (%) 34 38 39

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

Product and Financial Highlights - Fiscal Third Quarter 2021

* Advanced Products represented 72% of total revenue, an 8% increase quarter over quarter and a 15% increase year over year. Zynq platform revenue grew 24% sequentially and 29% year over year, representing 27% of the total revenue. The sequential strength was driven by improvement in the Automotive and Broadcast end markets and the ramp of 5G in the Wireless end market. * Xilinx shipped its first production 7nm Versal ACAP parts to a leading wireless OEM, enabling the advanced signal processing performance and adaptability needed to deliver the next-generation 5G technologies like beamforming. Xilinx continues to make progress on broadening the Versal portfolio with additional Versal products in late-stage development. * Xilinx introduced Zynq RFSoC DFE, which combines hardened digital front-end (DFE) blocks and adaptable logic to build high-performance, low-power, and cost-effective 5G NR radio solutions for a broad array of use cases, ranging across low, mid and high-band spectrum. * Xilinx announced a collaboration with Texas Instruments to develop scalable and adaptable DFE solutions to increase energy efficiency of lower antenna count radios. * Xilinx and Samsung announced the availability of the Samsung SmartSSD Computational Storage Drive (CSD). Powered by Xilinx's FPGAs, the SmartSSD CSD provides the performance, customization, and scalability required by data-intensive applications. * Xilinx announced the acquisition of Falcon Computing Solutions, Inc., a leading provider of high-level synthesis compiler optimization technology for hardware acceleration of software applications.

Commentary on AMD Transaction

As announced on October 27, 2020, Advanced Micro Devices, Inc. (AMD) intends to acquire Xilinx in an all-stock transaction valued at $35 billion. The combination enhances AMD's leadership position in high performance computing, significantly expanding the breadth of AMD's product portfolio and customer set across diverse growth markets where Xilinx is an established leader. Due to the pending acquisition, Xilinx will not hold an earnings conference call or provide forward-looking guidance. Also, pursuant to the terms of the Merger Agreement between the Company and AMD, Xilinx will suspend declaration and distribution of its quarterly dividend as well as its open market stock repurchase program.

Non-GAAP Financial Information

Fiscal third quarter 2021 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, 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.

XLNX-F

XILINX, INC.CONSOLIDATED STATEMENTS OF INCOME(Unaudited)(In thousands, except per share amounts) Three Months Ended Nine Months Ended

January September December January 2, December 2, 2021 26, 2020 28, 2019 2021 28, 2019

Net revenues $ 803,404 $ 766,535 $ 723,499 $ 2,296,612 $ 2,406,497

Cost of revenues: Cost of products 249,529 218,120 233,324 693,753 804,197 soldAmortization of 6,875 6,696 6,697 20,268 15,699acquisition-related intangiblesTotal cost of 256,404 224,816 240,021 714,021 819,896 revenuesGross margin 547,000 541,719 483,478 1,582,591 1,586,601

Operating expenses: Research and 235,018 219,647 211,541 664,776 638,621 developmentSelling, general 136,701 113,793 109,612 355,877 328,633 and administrativeAmortization of 2,856 2,862 2,919 8,581 5,488acquisition-related intangiblesTotal operating 374,575 336,302 324,072 1,029,234 972,742 expensesOperating income 172,425 205,417 159,406 553,357 613,859

Interest and other 3,709 (10,771 ) 6,437 (19,215 ) 30,378income (expense), netIncome before 176,134 194,646 165,843 534,142 644,237 income taxesProvision for 5,162 830 3,831 75,517 13,774 income taxesNet income $ 170,972 $ 193,816 $ 162,012 $ 458,625 $ 630,463

Net income per common share:Basic $ 0.70 $ 0.79 $ 0.65 $ 1.88 $ 2.50

Diluted $ 0.69 $ 0.79 $ 0.64 $ 1.86 $ 2.47

Cash dividends per $ 0.38 $ 0.38 $ 0.37 $ 1.14 $ 1.11 common shareShares used in per share calculations:Basic 245,145 244,837 250,546 243,976 252,330

Diluted 248,148 246,763 252,808 246,786 255,758

XILINX, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) January 2, March 28, 2021 2020* (unaudited) ASSETS Current assets: Cash, cash equivalents and short-term $ 3,324,425 $ 2,267,216investmentsAccounts receivable, net 269,605 273,028

Inventories 300,107 304,340

Other current assets 73,112 64,557

Total current assets 3,967,249 2,909,141

Net property, plant and equipment 351,513 372,574

Other assets 1,430,203 1,411,619

Total Assets $ 5,748,965 $ 4,693,334

LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued liabilities $ 614,227 $ 586,421

Current portion of long-term debt 499,865 499,260

Total current liabilities 1,114,092 1,085,681

Long-term debt 1,492,377 747,110

Other long-term liabilities 543,605 545,494

Stockholders' equity 2,598,891 2,315,049

Total Liabilities and Stockholders' Equity $ 5,748,965 $ 4,693,334

* Fiscal 2020 balances are derived from audited financial statements.XILINX, INC.SUPPLEMENTAL FINANCIAL INFORMATION(Unaudited)(In thousands)Three Months Ended

Nine Months Ended

January 2, 2021

September 26, 2020

December 28, 2019

January 2, 2021

December 28, 2019

SELECTED CASH FLOW INFORMATION:Depreciation and amortization of software$

30,818

$

30,249

$

26,331

$

92,816

$

68,882

Amortization - others17,133

15,316

15,276

47,508

37,326

Stock-based compensation66,331

58,439

50,157

175,153

142,732

Net cash provided by operating activities360,137

247,583

323,575

853,191

845,485

Purchases of property, plant and equipment and software6,009

15,331

34,138

36,801

96,980

Payment of dividends to stockholders93,155

93,105

92,931

278,674

280,376

Repurchases of common stock-

-

260,939

53,682

738,184

Taxes paid related to net share settlement of restricted stock units, net of proceeds from issuance of common stock4,560

30,072

3,565

37,871

55,541

STOCK-BASED COMPENSATION INCLUDED IN:Cost of revenues$

3,465

$

2,963

$

2,961

$

9,149

$

8,386

Research and development40,228

36,110

31,543

106,707

86,119

Selling, general and administrative22,638

19,366

15,653

59,297

48,227

XILINX, INC. SUPPLEMENTAL FINANCIAL INFORMATION (Unaudited)(In thousands) Three Months Ended Nine Months Ended

January September December January December 2, 2021 26, 2020 28, 2019 2, 2021 28, 2019

SELECTED CASH FLOW INFORMATION:Depreciation and $ 30,818 $ 30,249 $ 26,331 $ 92,816 $ 68,882amortization of softwareAmortization - 17,133 15,316 15,276 47,508 37,326 othersStock-based 66,331 58,439 50,157 175,153 142,732 compensationNet cash provided 360,137 247,583 323,575 853,191 845,485by operating activitiesPurchases ofproperty, plant and 6,009 15,331 34,138 36,801 96,980 equipment andsoftwarePayment of 93,155 93,105 92,931 278,674 280,376dividends to stockholdersRepurchases of - - 260,939 53,682 738,184 common stockTaxes paid relatedto net sharesettlement ofrestricted stock 4,560 30,072 3,565 37,871 55,541 units, net ofproceeds fromissuance of commonstock STOCK-BASEDCOMPENSATION INCLUDED IN:Cost of revenues $ 3,465 $ 2,963 $ 2,961 $ 9,149 $ 8,386

Research and 40,228 36,110 31,543 106,707 86,119 developmentSelling, general 22,638 19,366 15,653 59,297 48,227 and administrativeXILINX, INC.RECONCILIATIONS OF GAAP ACTUALS TO NON-GAAP ACTUALS(Unaudited)(In thousands, except per share amounts)Three Months EndedNine Months EndedJanuary 2, 2021

September 26, 2020December 28, 2019January 2, 2021December 28, 2019GAAP gross margin$

547,000

$

541,719

$

483,478

$

1,582,591

$

1,586,601

Inventory valuation adjustment-

-

2,114

-

3,856

Amortization of acquisition-related intangibles6,875

6,696

6,697

20,268

15,699

M&A related expenses114

-

-

114

-

Non-GAAP gross margin$

553,989

$

548,415

$

492,289

$

1,602,973

$

1,606,156

GAAP operating income$

172,425

$

205,417

$

159,406

$

553,357

$

613,859

Inventory valuation adjustment-

-

2,114

-

3,856

Amortization of acquisition-related intangibles9,731

9,558

9,616

28,849

21,187

M&A related expenses19,150

1,506

3,042

22,219

12,393

Non-GAAP operating income$

201,306

$

216,481

$

174,178

$

604,425

$

651,295

GAAP net income$

170,972

$

193,816

$

162,012

$

458,625

$

630,463

Inventory valuation adjustment-

-

2,114

-

3,856

Amortization of acquisition-related intangibles9,731

9,558

9,616

28,849

21,187

M&A related expenses19,150

1,506

3,042

22,219

12,393

Income tax effect of tax-related items(528

)

-

(3,697

)

56,273

(1,838

)

Income tax effect of non-GAAP adjustments(5,100

)

(1,470

)

(2,316

)

(8,160

)

(6,133

)

Non-GAAP net income$

194,225

$

203,410

$

170,771

$

557,806

$

659,928

GAAP diluted EPS$

0.69

$

0.79

$

0.64

$

1.86

$

2.47

Inventory valuation adjustment-

-

0.01

-

0.01

Amortization of acquisition-related intangibles0.04

0.03

0.04

0.12

0.08

M&A related expenses0.07

0.01

0.01

0.08

0.05

Income tax effect of tax-related items-

-

(0.01

)

0.23

(0.01

)

Income tax effect of non-GAAP adjustments(0.02

)

(0.01

)

(0.01

)

(0.03

)

(0.02

)

Non-GAAP diluted EPS$

0.78

$

0.82

$

0.68

$

2.26

$

2.58

GAAP cash flow from operations$

360,137

$

247,583

$

323,575

$

853,191

$

845,485

Capital expenditures (including software)(6,009

)

(15,331

)

(34,138

)

(36,801

)

(96,980

)

Free cash flow$

354,128

$

232,252

$

289,437

$

816,390

$

748,505

Source: Xilinx Newsroom

Category: Corporate Announcements

View source version on businesswire.com: https://www.businesswire.com/news/home/20210127005870/en/

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