Xilinx (XLNX) 25 Apr 182018 Q4 Earnings call transcript

Company Profile

Participants

Rick Muscha	Xilinx, Inc.
Lorenzo A. Flores	Xilinx, Inc.
Victor Peng	Xilinx, Inc.
Ambrish Srivastava	BMO Capital Markets (United States)
Toshiya Hari	Goldman Sachs & Co. LLC
Blayne Curtis	Barclays Capital, Inc.
C.J. Muse	Evercore ISI
Tristan Gerra	Robert W. Baird & Co., Inc.
John Vinh	KeyBanc Capital Markets, Inc.
William Stein	SunTrust Robinson Humphrey, Inc.
Joseph Moore	Morgan Stanley & Co. LLC
John William Pitzer	Credit Suisse Securities (NYSE:USA) LLC
Kellan Grenier	Nomura Instinet
Philip Lee	Citigroup Global Markets, Inc.

Call transcript

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Operator

Good afternoon. My name is Jessie and I'll be your conference operator. I would like to welcome everyone to Xilinx's Fourth Quarter Fiscal Year 2018 Earnings Release Conference Call. Please limit your questions to one to ensure that management has adequate time to speak to everyone. I would now like to turn the call over to Rick Muscha. you. Thank Mr. begin may conference. your you Muscha,

Rick Muscha

good Thank Peng, me Victor With and you, Lorenzo and CEO; Flores, are afternoon. CFO.

the We will quarter, open March review of for provide a financial and and then business the call questions. we'll

materially. actual make A future are differ contained to can XX-Ks, be that the could call is caution differ everyone you wish reconciliation refer regarding conference based financial website. we with contain that forward-looking remind X-Ks. factors that actual remarks, conference me Relations risk webcast is Investor materially predictions the forward-looking on In the all and our references. the accessed of projections that you These our or the during following other important the most is Let or events and documents to to statements performance call that in our live. comparable today, will such Lorenzo's Xilinx's This may may found information financial future being immediately from cause financial complete Investor measures those he non-GAAP Relations to statements. available the prepared currently can results SEC, XX-Qs or projections We GAAP documents call. open We be this statements company files to identify including on directly several from make our It and our website results and company.

Let me Lorenzo. now the to to call over

Lorenzo A. Flores

high-end the guidance provided This was Products, billion from XX% our excluding XX% XXXX, the unusual XXXX, driven came X% markets which for with outside cost Day. at in Rick. growth XX.X%, our Xilinx our FY our executive XX%. averaging revenue the very margins Gross in year. of year remained delivered we the fiscal QX, end fiscal at by the our across strong in you, previous record All margin for and the exceeded grew year communications year margin XXXX. Analyst over growth transition Advanced $X.XXX year, broad-based Thank revenue in of throughout over markets. end grew at and Operating up associated of operating

year, per $X.XX GAAP earnings the of fiscal share. generated Xilinx For

the As noted reform significant. tax quarter, last earnings impact on of we our was

We a would our transition. growth also XXXX. expenses the had a executive $X.XX those related share, over Without XX% our been to of items, approximately have EPS FY

million our Now XX% and end year-over-year. March We $XXX sequentially Sales as increased X% top record up the for exceeded guidance to of quarter. the a of range. we were

by also Advanced growth driven Our and which our revenue in Products, sequentially were up broad-based year-over-year. was up XX% X%

expense, All or million and operating transition the of was Defense. with $XXX grew approximately for in Core for line expense million was our the with was $XXX primary related Operating Operating our of was $XXX Aerospace million. quarter Industrial, million. strength particular one-time charges quarter in XX.X%, margin guidance. Gross income markets our $XX XX.X%. to end including CEO

related for we quarter, Excluding to due to tax Tax operating transition the was margin expenses XX%. was legislation. the executive higher rate additional than guided reform XX.X% costs

Our net share. or $XXX QX million per income was $X.XX for

and I'd few billion a and sheet net $X.X fiscal the year the in Now like flows. We after cash with to key cash points gross highlight on debt. our ended balance $X.X cash billion

we and of $XXX and share the shareholders we generated year dividends fiscal million operating in returned to $XXX XXXX, form million in During cash flow, repurchases.

million cash program. the in and authorized the the of our million repurchases. $XXX increase Since recently quarter, form We year. for $XXX million $XX returned share to shareholders our average million, inception, consecutive we utilized approximately a of back was $XXX shares operating repurchase bought board flow an fourth X.X have and million XXth share. approximately to $XXX dividends for an price in $X Our share we dividend In of $XX billion million of

$XX.XX of the We have our end ended million have fiscal an year. $XXX price of at execute repurchase last million the continuing share a at program. share. average year from shares and We XX.X repurchased shares, million down now million are to We remaining XXX on at our approximately with on authorization XXX

Now guidance. $XXX between to we In for million June quarter, sales the are and $XXX be expecting million.

center down, to after and of on primary automotive of the order as also down be Industrial We data consecutive the expected down the will is be achieve reflecting quarters. expect be be end With be the and will to modestly. XX% up consumer, a to approximately record modestly A&D guidance. to denial several ZTE, regards although expect communications slightly will markets, this up. group midpoint we of center impact element turns Broadcast, data

publishing more reflects a to which the we an sell-in of guidance estimate the XXX the effect us XXX, a adoption sell-through financials. estimated a ASC Our mandated on Relations In Investor ASC our complete be from impact our of of moves of website the next weeks, of will discussion few on model.

approximately expected XX% margin to to be XX%. gross Our is

operating be million. expense $XXX to expect approximately We

Our and tax rate XX%. is expected to be between XX%

call now Victor. the me over to Let turn

Victor Peng

in Compute product accelerating industry's deliver and Acceleration driving adaptable, Lorenzo. our product about or of year end was markets. and in fiscal increase the Platform the accelerating of an business a you, future broad-based everyone. our mission center our Adaptive category, Good family. afternoon, on our I'm I of revenue ACAP billion consist I world. project, new by Growth X% our pleased to record Thank the Everest execute and growth first strength on that elements, ACAP data excited of building year top computing. fiscal $X.X we also line report of announced will markets has over revenues driven X-nanometer adaptive growth majority intelligent I'm three as core extremely are strategy Recently, to delivered XXXX, focus the XXXX. in our which described first, our of the

established data center ecosystem. the year. the developing the building and in both over significant market fiscal for ACAP our year end are on of first We track past out later vibrant for momentum a tape-out product foundation this We've

XXX now to trained developers instances. in environment have than for in quarter to APIs library, our development XXX the March more to we developers on FPGAs frameworks. for We've our approximately F-X SDAccel develop based example, middleware continued and industry-standard For Xilinx making program using our invest how software AWS's alone, easier with it and

TensorFlow. machine we on an released environment a AWS the speed As example, for support to recently F-X learning

Xilinx We Zynq-based an expect significant revenue FPGA platforms. focused the our ACAP evolving been near market end longer the and be with soon, fastest-growing to over the in center data has for term. to platforms company term levels

underway creating through years our of software integration SoCs ecosystems. been has for the XD suites transformation and programmable powerful developing several last developing development partner Our chips, ICs, the through and

Our for architectures are Zynq platform element ideal are SoC critical our of and a multimarket products expansion.

Our have sales XX% XX-nanometer more year-on-year. product new XX-nanometer growing a achieved record, Zynq than and MPSoC

a has multiple architecture The which momentum RF-class analog family, the to technology, full RFSoC applications. with of in end exceptional Our product this to breakthrough RFSoC integrated shipped design-in year. will markets be by has about with across date and customers middle production XX

I Analyst to data FY Day at robust details plans shareholder forward markets our with for our on XXXX and will May. build growth long-term at new sustained, We the sharing value. in our our for strategy more our about in look core center beyond accelerate and strategy our and growth momentum delivering and

for the it Let back me to now turn operator Q&A.

Operator

comes Bank Ambrish Your Montréal. of first question from Srivastava from

is line Your open.

Ambrish Srivastava

up, question very this basis past year-over-year know rec? in you on time the almost you going you. which in can have rev the row Accounts a but and does Thank I to gone they've do Lorenzo much, predict at I ask quarters looking it two to with now, am new receivable, a

Lorenzo A. Flores

No, standard not really, haven't the because we implemented yet.

again, similar again before shipments. happening when the again, to this what XXXX. with high. accounts we had And FY in back-end I the they're said it's shipment some in will quarter. quarter, patterns receivable, We What's It's loaded during have

concerns at it's is be actually, the and it a days to cash need into collectability no We perfectly again, thing. and it's drive working it. bring to the candid, But So we'll down the that number so back keep I'd company there's like just get it. to just on down working gross and timing be

Ambrish Srivastava

On follow-up could new way up TAM please Victor. looking how to business in great? versus explain have at the companies I'm new the offerings you of terms of FPGA In that it, cannibalizing? Then open revolutionary opportunity Okay. seems least because the be of existing what cannibalization we're worried be for for does always kind it. But pretty it. of my past, is about much you. if that'd Thank So, does reversed you at you this the ACAP, think much to are about how revenue is it how opportunity, existing

Victor Peng

significant Yeah think that be I there'll SAM extension. actually

I to we're is our I its are about will So I first think think at waiting is And, as very already is platform then overall the goes, say expect in you not the as of is Zynq lot long. early as way Zynq, it second-generation, a okay? a that time year quite revenue the well as even the of look one of mean but to could of ACAP one markets software gotten that. generation and products. unveiled the today be those some have and the to is expansion in give of (XX:XX) to of and I that. boost with it quantum MPSoC our out beyond powerful the if developers the you ramp when Zynq, platforms significant in you then terms company but we're this extension. of definitely kind that fact sockets extension. that. some of beyond year TAM which both a start of know, getting we our refresh well use our goals We're doing shared take XX-nanometer SAM for taping life about SAM ACAP out already to some I as a even closest will existing mean, as And enabling definitely that's huge ACAP terms As product generation is, strategy that and a most our leap but revenue

Ambrish Srivastava

you. Thank

Operator

comes with Goldman Your Toshiya next Sachs. Hari question from

Your open. line is

Toshiya Hari

Hi. taking Thanks for question. the

well. You about is ZTE Huawei the impact? risk you're And, to as think talking was in about how a numbers big embedding extent that investigating here, to DOJ the related guide talked comfortable guys your there report I the

as should how we part that forward? of handicap business your going again well So

Lorenzo A. Flores

just are up, So obviously look should in of can certainly have be with are do nor in the aware I'll order you disclose through the of I think get questions denial I answer order. with the and close. at obligated certainly saying quarter think that's ZTE, business advance some how of anyone broader quarter went the another respect despite denial have strength and the that and But really which may business proportion sense we come respect I we customers to for our we get to we any would we don't to relative compliance and we strong the start communications to of our to want into XX% we with the ZTE. headwinds with these as to And a guide with

specifically and obviously So we're we're the just press monitoring with it, aware on the report Huawei of situation.

Toshiya Hari

Okay.

that fair guys assume revenue assuming pretty forward? So to for ZTE going is $X much it are you

Lorenzo A. Flores

For this quarter?

Toshiya Hari

Okay.

Lorenzo A. Flores

order. did we business of weeks two before But denial the have

Toshiya Hari

a which Okay you R&D guys. platform, spending business I in it. over press on quick obviously, number ACAP four a isn't follow-up, in And got the release about billion $X the past your then on necessarily for Victor, as you about years this small talked think

years, similar rate think in that R&D As R&D growth now we profile, over bit we perhaps, in or R&D could you're little of over next should about come your you the couple the the hump? do think a growth off expect

Victor Peng

this Well, just I shared time kind a is say. ever investment let for level program. the particular of first we me believe of the

it's there's a that mean, even period investment little into Overall, not at entirely, a your we I first of So very I'm it it's of time not invest fairly prior that to give a to lot all going there. before tape-out. unusual have tape-out, long goes to and context

X-nanometers. different no a it's product is, basis is the, a that Everest basis, on platform because an and investment respect, absolute how relative more powerful qualitative there is, but that in is So of it on category, new

course, not fundamentally that be of advanced of and requires is it's to additional technologies I but want So complex also do like clear X-nanometers different. investment,

extremely have revenue to that. We have cycles go we long and long and development fairly with robust cycles,

overall In OpEx terms of guide.

at discussing be going I think we're Day. going be we're to to Analyst (XX:XX) where at

investing to for think don't balance good earlier saying, pretty extension right it's between the but But also this to giving I return to things trying share I an me appropriate thing sustained SAM that shareholder. for So say, would I've point. the to always consistent and we're at long-term in been growth like question

a thoughtful try So we of to the two. always do balance

Toshiya Hari

Thank you.

Operator

You're next from with Blayne Curtis Barclays. question comes

line Your is open.

Blayne Curtis

taking I currencies in my your bit, seen just have tailwind guys. for you've of the want curious just from if Hi, question. your there's was on And there, been a a the kind bucket if consumer back? positioning your you of kind just Thanks cryptocurrencies, of pull of offset fallen most outlook I you that to if boxes, a off can about ask of to new currencies future address high of curious the June? at generations, level maybe some a into an positioning any lot talk just as maybe just curious,

Victor Peng

it's $XX again, would nothing's say exposure low into about Analyst kind supporting bit And and all really a because we'll it's volatile, talked mean, also that. know, first we material, very volatile, million Sure. quarter we changed again, as that's while that becoming ever we did the you so last that the the was it and maybe somewhat opposed I feel is crypto time guys course, as But did hear the building not to, and Day. like The current to we're we about successful. that from if what in And baked we talking we see trying number, instance. GP guide. of volatility's changed. were we you for are world, that to them you say I trying recall, know that the discuss from those more products make the customers, of

Blayne Curtis

the into are comments you very I down just it's June? about And in some just that Industrial, segments strength moderating A&D, June. then sub seeing That's to ask there as wanted the maybe the as helpful. maybe on What slightly well

Lorenzo A. Flores

things of the couple moderating June. a So

test couple which of of record measurement Defense. and for had drivers very in one emulation of good year. the in quarters a defense also specifically, was So aerospace row a strength of And we've Aerospace part we've the quarters of the industrial, string of a the and had and Industrial,

So always industrial the strength little been offsetting those that. of scientific off, of and medical business. things a that, there's are volatility in And piece some there's in but

think the I trend all, in all So general is up.

call defense through us through back strong a than and industrial collection the that been will aerospace some quite on If be you go quarters, of that basis, quarter-to-quarter and stronger but others has end year. markets for we the

Blayne Curtis

thanks. Okay,

Operator

question next with C.J. Your Muse Evercore. from comes

line Your is open.

C.J. Muse

you taking for question. my good Thank Yeah, afternoon.

First quarter, trajectory about you new into breadth you sign the question, of as year-over-year normal you almost data thoughts the portfolio, center? XX% you of that's love new if should hitting of Curious think your guide, bring about your we on that in growth March and you're a Would to a level. midpoint how for and as up offerings broaden the think the in the here? guys at hear

Victor Peng

it's Victor. Yeah,

out so under really me for unveiled we April, last full over said, and took CEO statement, the a vigorously. and had certainly I year, I in strategy, and have very year when and pushing that that. strategy come the explicitly as the are sales marketing, I So growth earlier as being didn't then more we with owning said drove sales just came we we while out

core So been again, from and just doing pushing well business year of continues The we to more the growth. industrial we're more as a there, is building core seeking in very but covered, strong. a them you'll Lorenzo our new it certainly growth not center well that's it's have now on a really because emerging businesses, record, a happy Analyst, aggressively of hear very but some be May areas A&D of right lot well, already have combination at material data absolutely, was area but TME as was of but record, an friskiness, our ISM, a and kind revenue it's with as

So we're continue drive we to and can. as broad going hard have we strength, as to that

C.J. Muse

got in I quick billion a Lorenzo, could net follow-up. $X.X cash. And ask just if you've I think

free You're per million-plus flow on to year. cash $XXX track

we're been $XXX considering a million I cash from line here aggressive, per perspective? seeing consider that the Would flow around you more trend buying think you've year. free back being

Lorenzo A. Flores

thing will Day. I So But not the is changed, overall invest depth at is another principles strategy in address tell have want I yet we'll Analyst growing capital to you and first that in which allocation greater foremost, think the our our business. we

hear a always more well, Now historically, repurchase. know to and mostly if our if, we that, pay recently but continue want year, I to means, we've then did dividend. thoughts considering guess, beyond again been capital later. specifics, have I We this of doing opportunity to with you any share still allocated flesh that be you'll out portion as been grow other that? organic inorganic allocation our dividend more, open will don't Victor, But to and a on we

Victor Peng

No.

new that growth. The meets revenue inorganic a tool. think for exercise (XX:XX) right share And we'd objectives also of strategically, I that also have we I'll strategy. for a if the means align see we profitability, tool. got opportunities think that course I is We're and we driving

was the think that's account, be there otherwise after if take we'll basic start to Lorenzo that, I but saying, same So help? philosophy some we seeing obvious that That what suppose. I that, modulation continue might into

C.J. Muse

Thank you guys.

Operator

from Gerra comes Robert with Baird. question next Tristan Your

open. line Your is

Tristan Gerra

Hi, good afternoon.

Typically, would what quarter you March drove in that's core Looking decline, at characterize a and was X% increase? to product, their your that a the strength it the tends line as up sequentially. item one-time, so

Lorenzo A. Flores

I lost But but focused earlier obviously, rate would quarters products our from year. we the, was and older this the of it think we it's over run on. part it's I have quarter business It think time, not of decline. No, that the is the prior up as overall, a similar

drive, continue Advanced along lost Products the We on, portfolio. focus have and with not to we

it from decline, is the at it but of should the beginning in not So any is where general, year. different it

Tristan Gerra

you in earning all much And in quarters proof-of-concept. then and mentioned prior the lead pretty Okay. had a XG significant having

As you the versus confidence expect next going that get quantification opportunity, or whether we deployments, gives closer are XG it any think XG content and some we to timing, of year? to perspective, XG can the declines perhaps that from mass a offset of you

Victor Peng

I'd And ramp, in what and these true. meaningful certainly in terms I guess said, We quite overall more believe lot just message the be to right? the in macro I production we've proof-of-concept that it all say early true. timeframe. there's is of varies of a multi-band. XXXX because that's XG continues deployment, terms also there's been that's do we've more content, a that stations, not in IoT, is base also small traditional cell, think It's

think umbrella quote-unquote broader of other is XG that previous any under and diversity I So systems the than the types falling generation. are way

hard kind say. So it's thing really a of to

want You'd the course down going we'll content actually not occurs. like to to more by and wireless now level there's broken the to have from to have the in narrate information conference. that the again, to denial, conference then of it we're And what say with ZTE Again, we sound comments unfolds just how is. perspective, don't could investor have a hopefully, add now but more our see investor a be I record, also any color but certainly, there'll time more further the

Tristan Gerra

Great. you. Thank

Operator

Your KeyBanc comes Capital Markets. from next Vinh question John with

is Your line open.

John Vinh

question. taking for my thanks Hey, Great.

this headwinds going more we the we're business the carrier with see, business. opportunity, Just the and XG year-over-year until XXXX? see ban do this we seen a kind a or that three a year lot Obviously, declines an ZTE of view you slight stabilize of to take comms kind last you've there comms Is CapEx of China. and conservative get declines year, to the on in to should There's quarters. in for follow-up assume declines apparently in question

Lorenzo A. Flores

lack true, again contemplate the solid now. minus is denial we We of us with the with continues have better hard in fully information conference fully of point have situation, other again But everybody takes there's the Yeah actually the comment the we've that not that as We don't the have, timeframe. really earlier knows of things newness to it's really the of really XXXX sense, which complying was development trending like this at that. verbiage and product's trends In that XG this that, some down time whole that a the one balances, the right, again, certainly ZTE quarter. recent RFSoC to disruptive, on saying by any CapEx visibility But, hope investor traction product be but going until to we like around though confident but is initial very from people I markets. even XG change are there's other we're when the only counter the sustainable, no the see about off. deployments volume lot back that for

I that do So, think there's good comment of for some light term modeling really in especially near us it's hard the things particularly but on thing in to this.

Victor Peng

Right, yeah.

John Vinh

you B-share applied more applications you my can and think then this if you the need going of what bit more be used is, ACAP something My follow-up envision ACAP primarily in be us have question on or GPUs? cores something Victor center you and give without within understanding kind data And Great. is wondering not. is that think what is that of a just for is is kind little is could and do MPSoC ACAP for can edge was is a you embedded commentary for discrete that ACAP. to I on

Victor Peng

will be Yeah, the edge, at ACAP that's mean broad see a great it end. being it's I in scalable mean architecture. to a much that question. end I cloud, pretty Obviously the I

objective. like power much So pretty scale one cost criteria architectures' very of that from focused our is of can sort and some applications performance number to or pretty today

breadth. has it think that I So

it is architecture, year, the a more In And detail heterogeneous forward. elements multi-core right? a the already step it such mean of people help will will share little that course there are it I a terms is technical why through quantum understand we of is, what that better

other embedded but broader cases processes to the will it things, of be I certainly around. that look I if in will displace be scope CPUs able at some think

have GPUs think I will place. its

a targeted it's platform the I it's very in edge, multimarket. of think will the not run, ACAPs will mainstream long in be also and systems course cloud the ACAP also just be to be significant based in more but platform going so a and

the So think it just you shouldn't cloud. of terms of in

and SAM we've hear developing I and ACAP for already that's more why and to seen towards extension say and you'll So forward. FPSoC big movement that just people take Zynq it's going a step the

Operator

with question Your SunTrust. from next William comes Stein

Your line is open.

William Stein

there's Thanks end the you my in Great. the was questions. a can could great. by taking you A us remind could acceleration similarly what I that? And I Thank markets, revenue update or for couple that of market on goal server your certain ADAS be products been on if automotive, if market? you on good refresh that you us maybe you. in had And sort of end follow-ups know applications, us think of XXXX? adoption that'd remind goal

Victor Peng

you to million, sort aggressively, the you update but of being be much it, broader, much data go think the will center opportunity significantly than as We after to of that. more see opportunity with the that obviously, the and range it did really can more $XXX at data and XXXX. qualitative, strategy will we're being the million first midpoint $XXX past, that by element going that go estimate could center larger, be first. We say million we that in the I call said of in Yes, investor conference, $XXX

May. that hear you'll in about more So

of grow it's more again, that and I largely of majority segment, to continues going been our to grow automotive XX On the the the been, automotive And the ADAS at general XX%, first-generation of and side, ADAS it's continues that and strong is look and automotive Zynq. segment Zynq-based. if nanometers, than business, it's automotive the XX% roughly

had with but right. year, Zynq, not and we've MPSoC, wins the gone So generating activity things those for second the really significant to have the past design in production,

automotive know, still is you ramped development production. then a cycle, as again, pretty So long and

when driver XX-nanometer kind into So next of to to kicks is the I'd the say, grow we big ADAS the the but MPSoC, continue production. expect stuff

that We seeing ACAP, be are that, still automotive. vehicles. autonomous think that's again, seeing which, driving, ADAS, will including some covers that it going advance goes of autonomous more are we of right, we but that to into ACAP, platform the multi-markets, some

Okay.

map that's, the the to kind you with So succession. road of help

William Stein

Yes, helpful. you. Thank

Victor Peng

Okay.

Operator

Your Morgan next Stanley. question comes from Joe Moore with

line open. is Your

Joseph Moore

up the you looking about Thank could if follow this the fabric, us I you. growth scope Great. comment company an maybe wonder is you than FPGA the of just there. of think being tell you've about things so has mean, attached inorganic that on – if be that sort is are Zynq you I how more I far, kind FPGA and that an might RFSoC, adjacent all could of the and things that talked of to like or you to thinking still FPGA-centric, been this would might very are at? going opportunities be but

Victor Peng

just I'd about those look people element, say, of we disruptions obviously, a center talk data strategy, what center networking, of just would is a I know, in a any bigger well and play lot is in data like, again, accelerate of quite guess, the specifics, can mean, compute is, see to side, play of I'd how as is areas. the to on really Joe, our three compute Yes, think right, as it can't right, say storage but opportunity at I be there's and our we acceleration, which all center lot broad, data well really there's as in you I we right,

it, that at strategy, of at potential could our one think just about within can So opportunities any look actually we element you sub-segments. way of those

a off in but in accelerate our be taking of growth a you strategy talking core adaptive – core the business, do. be strategy. about at the things is board, some and any to our more growth about driving I'm so general may to not the chess to of not the that to want Now in so computing, what of look what's so okay, the table going element element drive the directional things that's some feature on second driven related just really of way is business, it of third also going kind to If our I taking

in So it that technologies it also be say, drive and also things could that. help that you could could sense, be

again, imagine, can be of technology talking all way the I we've broadly businesses. before, to significant as can't from specifics, looking yes, actually from, So, quite you we'll give course, done I think which but anything any

Joseph Moore

wanted to That's Zynq. helpful. you. the in strength I Thank about And then ask

the right mean, of What's sorry, drove you health year, about is higher new like a talked I Zynq, growth year. growth, revenue way actually it or of over point there's attach for opportunities? seems so sort then and that, your TAM the portion new revenues your to at think the growth. is much, of kind it's You one about XX% it looks opportunities crossed in of of that's, XX% that that it driving and growing like rate a

Lorenzo A. Flores

Yes.

very in was a there's to have you keep automotive. of he So and alluded discussing mind, important aspect earlier when Victor to that it Zynq

past even weren't first for suited expansion The for Zynq we markets expanding with it. us XX-nanometer XX-nanometer platforms, ADAS a markets, that with Then new example we markets. is and second-generation the play well platforms, for It it that into our and platform we more in MPSoC, programmable as address were a was and reaching us. a the of launched, SAM we're able to opened great

it play little expected, core sticky bit of we So the think for expansion it's to forward. now, strategy past Zynq product of a it longer it platform, for we a forward. is because ramp going part our as a and acknowledged in took It as durable is but nature of And I we've a market think, the than fundamentally going us.

Victor, helps well. to continue we'll our customers add you and it want grow to with expand as anything? So markets us

Victor Peng

Yes, have seeing, I seeing we're I part even as platforms, one's doing, think thing key no. customized platforms. doing that wanting this and segments, based thrust as overall cut again, point think single mentioned, mean, aren't to solutions again, solutions, so connected, its that. all of of the thing that well as And I to I we're frankly. traditionally that moving across things deploying everybody's companies intelligent No be on done the of that

system product point kind core just for is Zynq of think those architectures. I turning ideal platform So an

Joseph Moore

Great, thank you very much.

Operator

comes The next Suisse. from Credit with Pitzer question John

open. in change just provide any some quarter an afternoon results. I June Securities is it that into magnitude? information, accounting if quarter, like the on throughout to the I then Yeah the subsides change of Pitzer quarter going the strong but I relative of guide? starts that the the year? are It is missed detail. guess June Credit to William sounds Suisse apologize John (USA) a it there you LLC how line revenue Congratulations further guys good guys. is Your - the does trajectory it And quantify big September? to one the way How issue to impact Is Lorenzo,

Lorenzo A. Flores

explanation what's I'll of question qualitative be interested. other on, going the but not kind answer might who people a for more first of for So with just you,

talk and about it how impact to long-term. So, then business our I'll we expect

the in to the So, of we're management channel sell-in And I this us that rigorously. as from sell-through our managing channel to implement moves is partners have with and and a a important, to started we that. fundamentally, programs processes my remarks inventory these manage particularly inventory pretty model, work in new with said, to change which become a model

So time words, should business. our key channel with our in down other this the we inventory through some business trend aspect the In will of our into the of overall year fiscal be managed and restocking is the structure. part year. degree a as we that channel probably it moved of Over

and Disti be will you days the and should of time. there and levels kind inventory over state movements at to business. be up should other inventory. basis like down should it it the stay a on So something get level, steady future then on a But look in stabilize with trends at,

in we're results. quantifying level it more about be the with be quarter my we when release with certainly it But customers. it The will in aspect for for this detail going channel also it going we're specifically be of because to we just, I'm So that will mentioned show not you partners disclose are the right manage we get to transparent our able to to through I our their something quantitative to comments. that

was Lorenzo, on William so. Credit comparing John - to I'll just you the and history of XXXX impact us for FY So its the June understand, extent context I and the to sell-through revenue the channel is the But that Suisse so history, sell-in, LLC benefit Pitzer going so basis get a some have quarter? on product today June quarter that you in will (USA) Securities obviously, the to give in for you

Lorenzo A. Flores

be heard understood June a recognition. in increase a Will gone that's Credit Will recognition one-time John in waiting sell-in or channel have as it. - not? similar you a through I Other it that positive impact revenue companies turned seen but already this Pitzer you your Suisse benefit? sell-through I who LLC and in (USA) Securities into it taken for not quarter there guide they've question? have your sure William transition revenue I'm stuff Will see repeat

Lorenzo A. Flores

particularly would markets that you're markets? inventory as of software more I'm that you're we be Securities investment guess when positive dynamics specifically what in that Perfect. stack I do you So LLC the same managed acceleration inning but higher-level then to market, and about extent it the work Credit I'd a quarter going you That's way talking you forward? did Pitzer point, that end the Victor of it job know you the we've as to what don't those development? where through be this importantly, John the the helpful, exactly curious, Suisse at the opportunity. - good relative William say are you look a because in think your exploit say would transition. across just I does in expect help the referencing, (USA) And to other helpful this kind follow-on

Victor Peng

fiscal progress year even to plans Yeah, that I fiscal tremendous last would make on this and I progress we we build say and think have tremendous continue made year.

absolutely. I Having mentioned I are help think of of in great developer at fruits though training sort with this systems sizable and third the saying things, some expertise them. that. help seeing develop level people I multi-year or customers had capabilities elsewhere. are a of traditional I've most have And of our much We would you of only other more we're any forth, in cases so things development bring developers, that we of suites we're the see have, not that, seeing. shared to all center providing very have be absolutely customers, have products any just and this And a mean, going is more software said then libraries done. Because that us than the and people thing. them and and it resonates we we the other candidly progress we virtually higher sort, in in area if is do elsewhere, even FPGA see it they terms plenty data even that to something enabling, also hardware other that can market is, us of almost abstraction domain expertise, new to ASIC, have new parties bring and design FPGA of and rapidly, sort. of,

mean, some think there's in we in programs no that I cloud it's that so we're players, in things that kind the significant comms pollinate. cross people right, big some And definitely have customers interested a auto. of secret, doing lot have I of of in are and

Pitzer I longer a in and markets (USA) a question mean, the but out helpful. Securities just it. guys LLC way John nature because think little of bit the already, all Thanks those I moving that That's no see about takes we - congratulations. there, But of stronger. are interest bit definitely the it's some fact Suisse William Credit of So, that

Victor Peng

you. Thank

Lorenzo A. Flores

Thanks.

Operator

question comes Stein SunTrust. Your from William next with

line open. is Your

William Stein

bigger that just that than on the it the slower Thank Is before. discussed this opportunity million that timeframe? to will by, comments. update's balloon likely center said $XXX TAM much around suddenly a linear growth Or expect a I to calendar as sense Great. guess, is us wanted follow-up give Victor you. you be of data then Can I you and you that a to the reflect you'd something process? XXXX more linearity?

Victor Peng

I is developers, ACAP been describe next take it we that look, be a going peril, a that forth. so shape midrange the course, development guess it's people. laying made it's been always a not That building environment consistent don't think to and I've use, building said, and going sort ease feel it's of it's enough I linear. easier. do we've to long-term but on barrier developers, improves I tech while foundation, we're ecosystem, of think of this saying at inflection for some linear pretty thing. an software point. your to we're that to enough just at think so I get We've we've lowers it applications, the But that that, point, of But level, thing. the educated we're

the of growth. that's and exact more in and to software the hear always, course, was time, edge we over We but us leader, right? the from calling very hardware of that people the cloud. mindshare what And realistic. again, robust that not have But ACAP that conference I you'll shape, ACAP, inventor the end-to-end, the that's We're think yeah, legs have the our will the think investor I probably is give platform think is thinking of from oh right, won't – that and going programmable FPGA the to a

William Stein

you. Thank it. Got

Operator

Shah question with next comes Your Nomura Romit from Instinet.

Your line is open.

Kellan Grenier

just Kellan node. the Grenier another is was how were the on for I you're Thanks about on update just ACAP we wondering question. Romit. X-nanometer our number This for for thinking looking an at Hi. taking of follow-up tape-outs

we there? that year's for that of mentioned wondering the So broad kind at could somewhere X-nanometer, tape-outs of implied I offering, heightened same the in spending so spending of range tape-outs any to achieving smaller you XX-nanometer. commitment just if And given number Day, assume the update XX know there's while XX you Analyst last have

Victor Peng

per don't going unit exact do time, that powerful fullness tape-outs level be developing architecture. a what too, of more know say think to like we say to I done a also we'd over think if it's believe And investigating but we is to ever much node you not you that, architecture the respects, I and So obviously, means gets we right? that talk that so architecture mean the innovation the ACAP quite get Because time, – need number, some would with think give – such not to in be also Yes. the over the been it's will. guys you because, it's think to again, have XXXX, as in not going as you want try In wouldn't and We're lived may there you FY should reflected have me, like kind working cheap tape-outs period sense I that X-nanometer I time, technology, gave tape-out but don't precision. we're you to X-nanometers again. node, could the feel to we've OpEx right and – that, say we've the of of that working and of make course, would on sure I I I long of about tape-outs, I that's to when of and X-nanometers how we get about the also but balance. that I down. just think that as I be TSMC, is scalable. really going obviously, as rapidly. modular, simple excuse a see that.

Kellan Grenier

helpful. That's

Operator

from question Danely with – comes Chris Your Citigroup. your next last

Your line is open.

Philip Lee

Lee Thanks Philip ask Danely. letting of is for on question. me a behalf Chris Hi. This

year? mentioned XXXX activity Are in guys of from next you're seeing terms or in any calendar impact seeing ramp. you XG some right any benefit production from You pre-XG now

Victor Peng

It looking is I these I applications. we're customers how more being other well XG, rethinking are are Again, massive supports People benefit, have MIMO, in as right, seeing in they engagements the simple XG, are quite architectures, doing – the we're than than in having disrupted general, station. systems re-architecting base also the far device. radio. at doesn't be far, People everybody's great with mean, which disruptive. just definitely macro and how because mentioned architect. they're XG as to which the more it's a far, just RFSoC

level customer So think engagement customer – the yeah, great. is I the

deployment I customers product. the that's see of our continue stretch and timeframe. of we've more terms again, longer seen XXXX the revenue in that's ramp, of yeah, of a early learning opportunity. concepts learning our the we are But, are new good of over of to think great capability. We in But time, And do definitely a proof

Philip Lee

there. progress Victor. of them? competition? of a lead – Thanks, you can do about follow-up, think How far us as tell remind And you up talked line your the ahead against have a Can you you you where X-nanometer you

Victor Peng

now. of because about well, an Intel. right. non-traditional we really as GPUs much sure details alternatives would I'm the next really just feel not want areas, that the you And XP, hear also of of to sort you – about about had I to the it's don't and ASICs, We've talking that some that, us our what CPUs, will I doing in and because breadth part against exactly say our I haven't keep what position. think I leap is the referencing the I'm on happen eye And it, I really everything. obviously, ACAP getting now, may And concerned, that, certainly, architecture table steaks of about a but following they're competitive in competition, good team be the going that's you easily and as a Well, very heard of as node not evolutionary phenomenal doing mean, well, Be is traditional that like we're we to far But, what really earlier doing R&D the feed is compete in almost thing. you're now next

forward. step a quite a, at looking we're Now

position, and competition, doing of good like but really feel very we haven't so. of architectural we've the with I think I which I heard So it, than it's about maybe anything little broader are traditional the competitive kind heard innovation much our

Philip Lee

color. for Thanks the it. Got

Lorenzo A. Flores

Okay, cost transition the less for costs. executive the about the which is I million at number When I non-GAAP I GAAP in remarks, transition million we said clarify was in said I margin we brought concept $XXX of reading had $XX expenses. of $XXX statement million, base the quarter want how our my operating and I quarter. million $XXX have executive our XX% landing should operating misspoke talked made. just expenses, I when of operating I to then I fourth

to want Just get that on record. the

Rick Muscha

Pacific Time joining this a today. for Eastern Time, have of beginning We'll Thanks today. at call X:XX PM PM us playback Okay. X:XX

earnings our website. Relations release, visit copy a our of please Investor For

fiscal Our after City next much We market of Meeting earnings in Wednesday, completes be XXXX look the May release call. first your Analyst participation. year forward York to be the XX, July date will Thank for you This XX. an our on New We'll very quarter for seeing there. hosting close. you

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