Xilinx Reports Third Quarter Fiscal Year 2021 Results

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 2, 2021   September 26, 2020   December 28, 2019   January 2, 2021   December 28, 2019  
Net revenues   $ 803,404   $ 766,535     $ 723,499   $ 2,296,612     $ 2,406,497  
Cost of revenues:            
Cost of products sold     249,529     218,120       233,324     693,753       804,197  
Amortization of acquisition-related intangibles     6,875     6,696       6,697     20,268       15,699  
Total cost of revenues     256,404     224,816       240,021     714,021       819,896  
Gross margin     547,000     541,719       483,478     1,582,591       1,586,601  
Operating expenses:                      
Research and development     235,018     219,647       211,541     664,776       638,621  
Selling, general and administrative     136,701     113,793       109,612     355,877       328,633  
Amortization of acquisition-related intangibles     2,856     2,862       2,919     8,581       5,488  
Total operating expenses     374,575     336,302       324,072     1,029,234       972,742  
Operating income     172,425     205,417       159,406     553,357       613,859  
Interest and other income (expense), net     3,709     (10,771 )     6,437     (19,215 )     30,378  
Income before income taxes     176,134     194,646       165,843     534,142       644,237  
Provision for income taxes     5,162     830       3,831     75,517       13,774  
Net 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 common share   $ 0.38   $ 0.38     $ 0.37   $ 1.14     $ 1.11  
Shares 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, 2021   March 28, 2020*
(unaudited)  
ASSETS  
Current assets:  
Cash, cash equivalents and short-term investments $ 3,324,425   $ 2,267,216
Accounts 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 – others   17,133     15,316     15,276     47,508     37,326  
Stock-based compensation   66,331     58,439     50,157     175,153     142,732  
Net cash provided by operating activities   360,137     247,583     323,575     853,191     845,485  
Purchases of property, plant and equipment and software   6,009     15,331     34,138     36,801     96,980  
Payment of dividends to stockholders   93,155     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 stock   4,560     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 development   40,228     36,110     31,543     106,707     86,119  
Selling, general and administrative   22,638     19,366     15,653     59,297     48,227  
XILINX, INC.
RECONCILIATIONS OF GAAP ACTUALS TO NON-GAAP ACTUALS
(Unaudited)
(In thousands, except per share amounts)
Three Months Ended Nine Months Ended
January 2, 2021 September 26, 2020 December 28, 2019 January 2, 2021 December 28, 2019
GAAP 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 intangibles   6,875     6,696     6,697     20,268     15,699  
M&A related expenses   114             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 intangibles   9,731     9,558     9,616     28,849     21,187  
M&A related expenses   19,150     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 intangibles   9,731     9,558     9,616     28,849     21,187  
M&A related expenses   19,150     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 intangibles   0.04     0.03     0.04     0.12     0.08  
M&A related expenses   0.07     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
KEYWORD: CALIFORNIA UNITED STATES NORTH AMERICA
INDUSTRY KEYWORD: SEMICONDUCTOR DATA MANAGEMENT TECHNOLOGY OTHER TECHNOLOGY SOFTWARE HARDWARE
SOURCE: Xilinx, Inc.
Copyright Business Wire 2021.
PUB: 01/27/2021 04:20 PM/DISC: 01/27/2021 04:20 PM
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