Business Wire | Jan 26, 2022 04:20PM EST

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

Jan. 26, 2022

SAN JOSE, Calif.--(BUSINESS WIRE)--Jan. 26, 2022--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 $30 $31 $31amortization)

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

* 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, October 2, January January 1, January 2, 2022 2021 2, 2021 2022 2021Net revenues $ 1,011,059 $ 935,770 $ 803,404 $ 2,825,434 $ 2,296,612

Cost of revenues:Cost of products 275,479 293,327 249,529 852,247 693,753 soldAmortization of 10,059 10,150 6,875 29,275 20,268 acquisition-relatedintangiblesTotal cost of 285,538 303,477 256,404 881,522 714,021 revenuesGross margin 725,521 632,293 547,000 1,943,912 1,582,591

Operating expenses:Research and 287,969 253,881 235,018 789,824 664,776 developmentSelling, general 125,438 126,319 136,701 376,678 355,877 and administrativeAmortization of 2,000 2,252 2,856 7,093 8,581 acquisition-relatedintangiblesTotal operating 415,407 382,452 374,575 1,173,595 1,029,234 expensesOperating income 310,114 249,841 172,425 770,317 553,357

Interest and other 25,260 (9,204 ) 3,709 17,057 (19,215 )income (expense),netIncome before 335,374 240,637 176,134 787,374 534,142 income taxesProvision for 35,312 6,092 5,162 46,426 75,517 income taxesNet income $ 300,062 $ 234,545 $ 170,972 $ 740,949 $ 458,625

Net income percommon 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 $ 0.37 $ - $ 0.38 $ 0.37 $ 1.14 common shareShares used in pershare 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, 2022April 03, 2021*(unaudited)ASSETSCurrent assets:Cash, cash equivalents and short-term investments$

3,702,041

$

3,078,899

Accounts receivable, net439,397

285,214

Inventories331,071

311,085

Other current assets57,352

71,064

Total current assets4,529,861

3,746,262

Net property, plant and equipment328,202

345,023

Other assets1,487,378

1,427,916

Total Assets$

6,345,441

$

5,519,201

LIABILITIES AND STOCKHOLDERS' EQUITYCurrent liabilities:Accounts payable and accrued liabilities$

135,382

$

116,046

Accrued and other liabilities549,095

508,509

Total current liabilities684,477

624,555

Long-term debt1,493,623

1,492,688

Other long-term liabilities493,031

514,997

Stockholders' equity3,674,310

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.CONDENSED CONSOLIDATED BALANCE SHEETS(In thousands) January 1, April 03, 2022 2021* (unaudited)ASSETSCurrent assets:Cash, cash equivalents and short-term $ 3,702,041 $ 3,078,899investmentsAccounts 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' EQUITYCurrent 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 EndedNine Months EndedJanuary 1, 2022October 2, 2021January 2, 2021January 1, 2022January 2, 2021SELECTED CASH FLOW INFORMATION:Depreciation and amortization of software$

30,407

$

30,908

$

30,818

$

93,507

$

92,816

Amortization - others17,821

18,565

17,133

54,332

47,508

Stock-based compensation73,442

69,720

66,331

210,771

175,153

Net cash provided by operating activities362,263

122,117

360,137

874,277

853,191

Purchases of property, plant and equipment and software11,429

14,959

6,009

43,574

36,801

Payment of dividends to stockholders91,716

-

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 development45,323

42,273

40,228

129,057

106,707

Selling, general and administrative24,290

23,650

22,638

70,478

59,297

XILINX, INC.SUPPLEMENTAL FINANCIAL INFORMATION(Unaudited)(In thousands) Three Months Ended Nine Months Ended January 1, October January January January 2022 2, 2021 2, 2021 1, 2022 2, 2021SELECTED CASH FLOWINFORMATION:Depreciation and $ 30,407 $ 30,908 $ 30,818 $ 93,507 $ 92,816amortization ofsoftwareAmortization - others 17,821 18,565 17,133 54,332 47,508

Stock-based 73,442 69,720 66,331 210,771 175,153compensationNet cash provided by 362,263 122,117 360,137 874,277 853,191operating activitiesPurchases of property, 11,429 14,959 6,009 43,574 36,801plant and equipmentand softwarePayment of dividends 91,716 - 93,155 91,716 278,674to stockholdersRepurchases of common - - - - 53,682stockTaxes paid related tonet share settlementof restricted stock (154 ) 59,344 4,560 63,295 37,871units, net of proceedsfrom issuance ofcommon stock STOCK-BASEDCOMPENSATION INCLUDEDIN:Cost of revenues $ 3,829 $ 3,797 $ 3,465 $ 11,236 $ 9,149

Research and 45,323 42,273 40,228 129,057 106,707developmentSelling, general and 24,290 23,650 22,638 70,478 59,297administrativeXILINX, INC.RECONCILIATIONS OF GAAP ACTUALS TO NON-GAAP ACTUALS(Unaudited)(In thousands, except per share amounts)Three Months EndedNine Months EndedJanuary 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 expenses754

1,249

114

2,936

114

Amortization of acquisition-related intangibles10,059

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 intangibles12,059

12,402

9,731

36,368

28,849

M&A related expenses17,721

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 intangibles12,059

12,402

9,731

36,368

28,849

M&A related expenses17,721

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 intangibles0.05

0.05

0.04

0.15

0.12

Acquisition-related costs0.07

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/

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