Xilinx Reports Record Revenue in Fiscal Second Quarter 2022

October 28, 2021

SAN JOSE, Calif., Oct. 28, 2021 — Xilinx, Inc., a leader in adaptive computing, announced record revenues of $936 million for the fiscal second quarter, up 7% over the previous quarter.

Highlights

  • Record revenue of $936 million, representing 7% sequential growth and 22% annual growth amidst continuing industry-wide supply chain challenges
  • Aerospace & Defense, Industrial and Test, Measurement & Emulation (AIT) revenue increased 20% sequentially, with strong performance in all sub-markets led by another record performance in the Industrial end market and improvement in Aerospace & Defense business
  • Automotive, Broadcast and Consumer (ABC) revenue in the quarter increased 19% sequentially, with record quarters in all sub-markets, led by the Automotive end market
  • Wired and Wireless Group (WWG) revenue increased 9% sequentially and 42% year-over-year as robust global 5G deployments continue and strength from the Wired business
  • Data Center Group (DCG) revenue declined modestly, down 3% quarter-over-quarter, as Networking strength was offset by a decline in Compute
  • Platform transformation continues with total Adaptive SoC revenue, which includes Zynq and Versal platforms, up 9% sequentially and 56% year-over-year, and representing 29% of total revenue

GAAP net income for the fiscal second quarter was $235 million, or $0.94 per diluted share. Non-GAAP net income for the quarter was $266 million, or $1.06 per diluted share.

As permitted as of October 27, 2021 under 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 November 15, 2021 to all stockholders of record at the close of business on November 8, 2021. 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 second quarter of fiscal year 2022 comparisons are provided in the charts below.

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

Q2 Fiscal 2022 Financial Highlights

(In millions, except EPS)

GAAP

Q2

Q1

Q2

FY2022

FY2022

FY2021

Q-T-Q

Y-T-Y

Net revenues*

$936

$879

$767

7%

22%

Gross margin

$632

$586

$542

8%

17%

Operating income

$250

$210

$205

19%

22%

Net income

$235

$206

$194

14%

21%

Diluted earnings per share

$0.94

$0.83

$0.79

13%

19%

Non-GAAP

Q2

Q1

Q2

FY2022

FY2022

FY2021

Q-T-Q

Y-T-Y

Net revenues*

$936

$879

$767

7%

22%

Gross margin

$644

$596

$548

8%

17%

Operating income

$288

$246

$216

17%

33%

Net income

$266

$236

$203

13%

31%

Diluted earnings per share

$1.06

$0.95

$0.82

12%

29%

* No adjustment between GAAP and Non-GAAP

“Xilinx delivered another record quarter despite the continuing industry-wide supply chain constraints,” said Victor Peng, Xilinx president and CEO. “We saw broad strength in the vast majority of our markets in the quarter, driven by record performance from the Industrial, Auto, Broadcast and Consumer end markets, as well as improvement in the Aerospace & Defense end market. Our business and operations teams have made tremendous efforts to support our customers’ critical needs in what continues to be an extremely challenging supply environment. We also believe we remain on track for regulatory approval for the AMD transaction and to close by the end of the calendar year.

“Industry trends continue to drive strong demand for Xilinx products. Core markets are benefiting from multiple tail winds, including the increasing requirements for advanced processing and broad digitalization trends in all industries, that are driving both increased silicon content as well as overall demand. 5G volumes remain strong, led by North America and the Asia Pacific region, across multiple products. Our engagements with hyperscalers are deepening as FPGA-as-a-Service expands to new workloads, and we continue to drive solid design win momentum in Compute, Networking and Storage.”

“The record quarters in Industrial, Auto, Broadcast and Consumer end markets drove total sequential growth of 7% and 22% year-over-year,” said Brice Hill, Xilinx CFO. “Our transformation to an adaptive platform company continues to accelerate, with Adaptive SoC sequential revenue growth of 9% and year-over-year growth of 56%. In addition, Advanced Products grew 9% sequentially and 28% year-over-year and represented 74% of total revenue.

“Free cash flow of $107 million, or 11% of revenue, reflected expected normalization in working capital following exceptionally strong free cash flow in Q1. We are extremely pleased that record revenues, combined with strong gross and operating margins, drove record non-GAAP net income and non-GAAP EPS in the quarter.”

Net Revenues by Geography:

Percentages

Growth Rates

Q2

Q1

Q2

FY2022

FY2022

FY2021

Q-T-Q

Y-T-Y

North America

26%

23%

29%

20%

7%

Asia Pacific

48%

52%

48%

-3%

23%

Europe

16%

15%

18%

16%

14%

Japan

10%

10%

5%

8%

124%

Net Revenues by End Market:

Percentages

Growth Rates

Q2

Q1

Q2

FY2022

FY2022

FY2021

Q-T-Q

Y-T-Y

A&D, Industrial and TME

40%

36%

44%

20%

13%

Automotive, Broadcast and Consumer

22%

20%

16%

19%

70%

Wired and Wireless Group

31%

30%

26%

9%

42%

Data Center Group

9%

10%

14%

-3%

-22%

Channel

-2%

4%

0%

NM

NM

Net Revenues by Product:

Percentages

Growth Rates

Q2

Q1

Q2

FY2022

FY2022

FY2021

Q-T-Q

Y-T-Y

Advanced Products

74%

72%

70%

9%

28%

Core Products

26%

28%

30%

0%

8%

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)

Q2

Q1

Q2

FY2022

FY2022

FY2021

Operating Cash Flow

$122

$390

$248

Depreciation Expense (including software amortization)

$31

$32

$30

Capital Expenditures (including software)

$15

$17

$15

Free Cash Flow (1)

$107

$373

$232

Inventory Days (internal)

86

89

114

Revenue Turns (%)

23

27

38

(1)

Free Cash Flow = Operating Cash Flow – Capital Expenditures (including software)

Product and Financial Highlights – Fiscal Second Quarter 2022

  • Microsoft announced that Azure is now utilizing its NP-VM FPGA-as-a-Service infrastructure, powered by Xilinx Alveo accelerators, to dramatically improve the performance of Apache Spark on the Azure Synapse analytics platform.
  • Amazon announced the general availability of Amazon EC2 VT1 instances that feature the same Xilinx Alveo U30 media accelerator transcoding cards used in the SDK.
  • Xilinx and NEC Corporation announced a collaboration on NEC’s next generation 5G radio units, expected to be available for global deployment in 2022.
  • Xilinx announced that it has begun shipping its new Zynq RFSoC DFE in volume to multiple radio customers worldwide including a top wireless system vendor.
  • Xilinx and Motovis, a provider of embedded AI for autonomous driving, are collaborating on a solution that pairs the Xilinx Automotive Zynq system-on-chip platform and Motovis’ convolutional neural network IP to the automotive market.

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 as of October 27, 2021 under 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. The parties believe that the transaction remains on-track for regulatory approval and close by calendar year end.

Non-GAAP Financial Information

Fiscal second 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.

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.


Source: Xilinx, Inc.

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