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

Rhea-AI Summary

Xilinx achieved record revenue of $1,011 million in Q3 fiscal 2022, reflecting an 8% sequential growth and 26% year-over-year growth. The Data Center Group (DCG) reported a remarkable 28% sequential and 81% year-over-year revenue increase, driven by Compute and Networking. Aerospace & Defense saw a 21% sequential growth. However, Automotive, Broadcast and Consumer revenue declined 4% sequentially. The company reported GAAP net income of $300 million, or $1.19 per diluted share, and declared a cash dividend of $0.37 per share.

Positive

• Record revenue of $1,011 million, 8% sequential growth, 26% year-over-year growth.
• DCG revenue grew 28% sequentially and 81% year-over-year.
• A&D and total AIT revenue reached record levels, driving profitability.
• Non-GAAP EPS increased to $1.29, demonstrating strong earnings growth.
• Free cash flow of $351 million, representing 35% of revenue.

Negative

• Automotive, Broadcast, and Consumer revenue decreased 4% sequentially.
• Wired and Wireless Group revenue decreased 18% sequentially, indicating supply constraints.

• 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.--(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/

Investor Relations Contact:

Suresh Bhaskaran

Xilinx, Inc.

(408) 879-4784

ir@xilinx.com

 

Source: Xilinx, Inc.

FAQ

What were Xilinx's Q3 fiscal 2022 revenues?

Xilinx reported record revenues of $1,011 million for Q3 fiscal 2022.

How did the Data Center Group perform in Q3 fiscal 2022?

The Data Center Group achieved a remarkable 28% sequential growth and 81% year-over-year growth.

What is the diluted earnings per share for Xilinx in Q3 fiscal 2022?

The diluted earnings per share for Xilinx in Q3 fiscal 2022 was $1.19.

When is the cash dividend for Xilinx stockholders payable?

The cash dividend of $0.37 is payable on February 14, 2022, to stockholders of record as of February 7, 2022.

What caused the revenue decrease in Automotive, Broadcast, and Consumer segments?

The revenue decrease of 4% was largely expected after a record performance in Q2.