XLNX - Earnings call transcript Q1 2020

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Operator

Good afternoon. My name is Kathryn, and I will be your conference operator. I would like to welcome everyone to the Xilinx Q1 FY20 Earnings Release Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session [Operator Instructions].

to call like Poirier. to now would turn over the Matt I you. Thank Mr. your Poirier, you conference. may begin

Matt Poirier

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

of a and business provide for quarter. September the quarter will We outlook business review and the financial the June

may We statements statements. Let me Company. documents the those future the such conference to currently information you differ financial of XX-Ks, the differ during that XX-Qs actual wish forward-looking factors on and call make to contained results our to may with that actual results in These or X-Ks. we remind future risk predictions other materially. cause or contain documents files events, everyone We that caution and the projections available forward-looking could from Company or and our based including materially today, are identify you projections SEC, statements regarding our performance is the important refer that that

and intangibles and in such In financial measures, business. to be unusual purposes continuing by measures financial analysts non-GAAP effects comparability acquisition. will the non-recurring analyzing addition of one-time measures core facilitate to supplemental as results. and period-to-period business used management amortization the ongoing items believe Company's sharing the investors items, be these evaluating to for will helpful of evaluate that excluding certain Company's We to for GAAP provide disclosing financial related these by of certain non-GAAP measures We operations we

live. historical note we Web XXXX. our conference webcast posted that data Web we and can in our Xilinx Web earnings document a end non-GAAP is adopted the in site. closest have be May Relations release has A classification Investor also is on from GAAP call IR been open that This financial Please being posted reconciliation all It accessed for contain measure new to our market the Relations to Investor site. our site included of and quarter five information to is

to the turn now Victor. call me Let over

Victor Peng

good QX unexpected fiscal Huawei guidance XXXX today and our the uncertainty the Matt, target global enabled to employees saw despite and the well achieve the general of tremendous business. I'm current I'm end challenges. in by everyone. achieve as revenue shipping AIT, WWG, of to midway markets, pleased exemplify our occurred proud restrictions, to in resilience they We which our our of results Thanks, us effort which the the our durability ABC environment. and solid the afternoon, share quarter, midpoint growth despite as trade through as our

strong share I'll wireless in as during continued XG me initial XG and which start in around wired of at shipment the saw be global factor wave let Despite of the to remain will our customers Huawei we support the units suspension middle of this cycle. quarter, cycle, to our believe deployment. We continue than of well larger a positioned markets. our XG vertical we Now core complete business of the WWG. with highlights in many some demand

deployments Following last albeit deployment beginning the Korea measured the more we South the action. of in in seeing are Huawei year, given China,

applications products ramping base addition radio of We in are sales actively band. to supporting

course ASICs. Day, we continue to-date closely base our we radios watch mix market revenues the and will of been of noted our closely. seen very and band not building inventory wireless unusual customers, Analyst in Investor We've but as to portion to it have As to the anticipate shift we monitoring at a converts

Moving to DCG.

slowdown good make as quarter. next which for the application. in transition FAAF as customer, business continue shipments of a at hyper acceleration progress a both as well scalars, we their That FFAF multiple expect to to recover memory meaningfully said, not the Our significant and to latter on beat grow we a of did internal expected, as suspension orders due product Huawei to deployment, largely to

as scale SmartNIC. as our network customers video, such hyper acceleration as have Our begun deploying well for accelerating platforms production with streaming search, in application,

Alveo concept to tier customers with of our to top numerous progress POC make proof end continues with OEM.

We are contribution our details later year, revenue be fiscal be customers meaningful as later in anticipating this vertical into will sharing move production. markets call. additional as those POCs the to of well Lorenzo core

over going to the So I'm other to highlights turn now, in quarter.

was stronger in UltraScale+ and SerDes. revenue broad XX-nanometer sales an double extension QX. from and saw to to the year, products XX% business. be without which for leading our of We family industry in a driver for our bandwidth systems Last grew advanced Revenue customers XX% base year-over-year enable with Gig we demand These to the family, introduced XX new existing total A&D infrastructure. of markets PAMX that products TME XX gig deploying wired, continues

UltraScale+ Our Vertex new be in XXX production will Gig shipping soon. devices

as year. today. video extended by capacity adaptable and products transcoding will X workloads sampling gigabyte memory XX in Vertex X AI later family XX high capacity and already our HBM In high bandwidth Inference, are XX the into for products products that strong gigabyte These database processing. suited The our we we're The gigabyte demand, this process ideally such larger gigabyte datasets, adding production, addition, UltraScale+ go or sale. based products HBM production and on that acceleration, security are data HBM analytic, to customer gigabyte

revenue from our family core Zynq for and driven the our approximately wireless, of grew MPSoC represented across remains Revenue QX. platform XX% in markets. of year-over-year, Demand which our Zynq family strong, vertical adoption our by total in XX%

XX-nanometer Zynq cumulative growing at fact, We our products mark. Zynq revenue XX-nanometer even product faster see billion $X our the pace. In has crossed from

in started Series with our sampling adaptive strategy, first Core Versal customers. our and progress we In X-nanometer AI terms products QX computing of select Prime with Versal

this expanding early our be QX. customer will throughout access We engagement quarter

a number to-date latest and silicon of for processors. in gains on in applications solidly the significant FPGAs to general-purpose Versal that compared power XXx we're increase to Our testing indicates efficiency track and performance, generation deliver

platform I many see environment showcasing software experience development of a XDF in user you unified new there. Versal will to We will our enhance hope greatly that this the at our be October.

Now shifting of support video be already key to acquisition to a users. for compression with customers, of drivers data that Twitch portfolio product and one NGCodec activity. gained software We traction differentiated including centers. adds Video has the will cloud announced our to This growth the DCG the key our acceleration Alibaba. M&A

the network cycles, data well acquisition and to of Difficulty], unique free customizations bottlenecks, enterprise eliminate on are SmartNICs a and new this in track QX. network that as telco SmartNIC needs. We [Technical bandwidth Recall close hyperscalers, also will as acquisition customers. class centric brings new of These networking to Solarflare enable to up DX [HDC], customer

and Loranzo Now, off full compliance with our regulations. all I of before control to some to QX, hand a I provide comments our to want export Huawei. Xilinx to related QX U.S. detailed financials additional view is ensuring for committed

Department's designed Commerce applications. regulations XX-nanometer of Xilinx entities orders XG recently the all its current non-U.S. upon select Securities restrictions, Then These resume affiliates of such, are products was Bureau shipment As to in our not or the addition shipping immediately can mostly products, older Huawei fulfilling and from are lawfully Huawei. and of that we into mid-May, quarter. to and the and suspended we during after begun products. products Huawei, We've list administration determined export of entity Industry review

the additional issues to request resume. that cannot ship to and with our hope impact ability requirements actions is to remains so as government Huawei further submitted to trade We quickly to continue government Xilinx can emphasize to Commerce Huawei. global led as products possible, may U.S. and We dynamic. across we Department the of all situation I whether trade want will additional resolution have China driven for predict these legal to our sell actions as market licenses comply also reached operations. a that

in to it we remain are data now automotive strategy opportunities, significant you. unique conclusion, our to growth XG, turn to long-term confident executing over driven transformation focused Lorenzo. by and our and And disruptions, In platforms. Thank and center and our on very

Lorenzo Flores

described. business line revenue challenges even Thank up you, with XX% Total this Victor. sequentially. year-over-year million, at in well was guidance Overall, X% our with the Victor $XXX quite quarter and just performed

of markets set testament broad a the of resilience our revenue end from are diverse set. base results customer of and Our our

build XG group wired with grew. expanding continued drove the year-over-year Quarter-to-quarter, and wireless XX% quarter-over-quarter. X% out wireless growth and wired and The revenue in slightly declined

quarter-over-quarter. this base in from We Huawei the XX% and quarter, in customer declining than DCG. accounts, to broad the was growth an year-over-year on effect the drove guidance, less due ban restrictions. X% the but shipping growth multiple and broader showed Our below group our expected data have did although, Revenue Huawei hyperscalars center

an product inventory our related customers In going memory and addition, of transition, slowdown. had related through one a is

anticipated and we were than strong all in-markets trend by had we term AIT quarter, we our weaker quarter-on-quarter. were than industrial of we year-over-year strength grew In and expectations with long growth. decline amount growth and aerospace XX% X%, in accelerated X% with broadly less continue outperform TME. defense XX% industrial A&D In expected in some industrial and year-over-year grew customers. and TME a and in the though In modest orders Quarter-to-quarter, auto. AIT, ABC,

trade auto related slower stemming stronger quarter. China, decline consumers the than primarily from expected in due other was factors. in sales Broadcasting The to were

OpEx related and at line Gross to margin margin margin non-GAAP amortization. gross with $XXX non-GAAP GAAP XX.X%. as with in The was between lower expense million, gross than $XXX lower. million expense margin. and operating was due expected income and higher income million than was with at XX.X% or Operating and of $XXX slightly margins, was guidance XX.X% M&A GAAP million, GAAP operating margin difference operating Non-GAAP or non-GAAP GAAP was XX.X% operating operating our was slightly $XXX better margin gross is guidance. slightly

Our non-GAAP detailed here. approximately rates note X%. One GAAP were tax to

may the sharing tax be share expenses of you cost agreement. impact related Some altercation of of and to based aware the

refer Ninth our not impact as rate matter view as recognized decision Circuit have this tax our for the more unsettled. Court disclosure. Please recent We any XX-Q to from we on

$XXX income over XX% was $X.XX. million year. growth decreased Diluted to GAAP EPS non-GAAP per GAAP was net earnings Non-GAAP EPS yielding $XX share, year-over-year. a shares. and record count XX% net million million, $XXX a slightly last share income $XXX share grew of diluted diluted at a

and increased million few sheet in long billion I'll in term flow. Accounts Inventory billion declined for million $XX XX-nanometer. future at cash $X.X with $XXX build to XX a to cover balance days. points Next, as $X.X particularly on was and demand, $XXX Gross million we the receivable is debt. cash

$XXX cash Overall, flow. million we operating generated in

Investor implement activities. strategy and our investments to discussed and ecosystem continue M&A continued multiple during our as strategic We allocation Analyst Day. We our made capital our in

we of $XX at an $XXX.XX per During approximately repurchased paid of the and million. also share million price average quarter, X dividends shares

Now onto of FY our guidance XXXX. quarter for the second

shipments from impact $XXX between and to shipping related Huawei, contribution our our a expectation Huawei an of currently shipping quarter by quantifying estimate been be and trade revenue revenue to midpoint of products contribution range million license. year products restrictions than reflect for their We usual our other usual $XXX current guidance from we expect for from that government permissible Huawei more while range resumption wider revenue approvals and specifically, More are of uncertainty business and Huawei, the have other million. guidance than pending our reduced full includes aren't On The for this the variability. half.

offsets. is Building expect for base to but decline. point, business situation, and our do expected we slight wireless we center Wired some is to for Huawei our customer a Again, grow strength expected strongly. broad headwind the expected from rebound that provide across slightly. anticipate is to on a WWG the Data outlook decline is

healthy growth coming business. that's backlog architecture from our Our related advanced and memory significant indicate is

are well. hyperscalars expecting the business We other of growth expansion at as from

although, small. growth some from crypto, expect we relatively that volatile business and Finally, remains

to we result decline negatively by is order in business a in be timing macro expect Industrial in expected specific is A&D grow, to is a providing a partial anticipated driving expected decline an a QX. issues. AIT, of offset. For customer the and primarily program, TME. to pause impacted This

ABC is to and expected remain Our consumer forecast and to business broadcast auto steady. we We expect growth in grow QX. in

Huawei. related is is on QX decline expected that our we margin are due The to flat and revenue gross basis. XX% and related a guiding issues, to we said, expected. That resilience basis, as our to of non-GAAP the shipping to acquisition is continues recap, downward, our margin and Gross believe mainly To QX between and gross the outside XX% breadth trade of demonstrate the margin due restrictions GAAP business modestly outlook a on expenses. GAAP be on Non-GAAP in XX% essentially primarily incremental from XX% amortization model.

increase is approximately including and and expenses. in will As compensation expense acquisition inorganic organic growth Non-GAAP reflects stock million. grant million. Analyst discussed and is expense GAAP operating employee annual be we our compensation The our our $XXX QX, at primarily focal employee to due operating process, and expected increases in will The base. driven Day, growth to grow to $XXX be

quarter, While non-GAAP to outlook uncertain. close for to Solarflare or OpEx quarter revenue the close $XX timing million included employees. Solarflare on is estimates precise we expect onboard timing the the could not expense this Therefore, in we additional Depending have as $XX QX. of between close, the our million for be we of

quarter. also of slightly corporate to revenue expect revenue would mid single in We digit be This higher have the incremental high gross to than millions margin.

$XX other to be GAAP million. income is expected approximately non-GAAP and

for accounting This Our low a expected for tax one compensation. approximately rate X% rules rate tax quarter is is to due QX. phenomenon the share-based to be

normalize year half rate a range second in X% and expect the to quarterly We between to XX%. the tax of the

We is of the share grants. our QX, our slightly result expect net share repurchases, count annual which in offsetting to stock decrease

I overall close, economic interest outlook environment. will a monitoring Victor in China the this point we beyond At I are and As our and be the there realized in time, situation trade QX. great

these regarding important today. guidance not year are updating reiterating or uncertainty the we full our Given factors,

We October remain drivers provide at update an 'XX much our growth our very expect on intact. our call. believe fiscal we Overall, to outlook long-term earnings

have concerns, half FYXX be our year half. been somewhat by trade revenue than related better that to our the expectations fiscal believe we moderated first Although, will our second of continue

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

Operator

[Operator questions Instructions]. now floor The open for is

Vivek comes first Bank from Arya Your of with America. question

Vivek Arya

not Thank was it's customer so if September in the my be in near-term? since it really of year. helpful. that the about importance in so to hoping Victor, disclosed XX%, about that. last because was it investors. you And headwind But some of thinking I I how would a as much not give variable any much your for have sense really large and question. is the how rough in sense rough taking could thinking in was you. just realized how then Huawei it's a such you fiscal you are Thank June a it you business large of quarter,

Victor Peng

of But But are the to some particularly able our of is the important. I in the as customer Huawei important wired in were more look, strength Well, a markets to a no we as wireless very quarter Huawei the the hit the business we is said, other That of some resilience perhaps us. very XX% said, all quarter. customer FYXX. said, you FYXX as in nor well had being we able strong, first as other because to seeing AIT midpoint of in growth. guidance, also

offset plain, As a were lot of work that. just we hard to managed and we expected

way and that the think from Analyst I QX, the think have should fact said to you we that guiding flattish our down slightly would now at Day be we're QX

the mean, able the to our the that gave despite there that impact size, that that Lorenzo with. of, clearly range half is we than fact this from in said, begin range. general And hit just we mid of expectation we QX what less clearly thought current terms for shows is than I that down well slightly as shows were

about thinking this how now this So the think exposures reduced of because of about is greatly the we're way you around the is kind volatility should of business.

Operator

the Stanley. question Your Moore of comes Morgan next Joe from line with

Joe Moore

you what's if expectations half context? come you down the year, down, or see How pretty if around flexibility that? wondering that thinking in you the the OpEx I'm revenue variability in are come just -- clear. about OpEx second the that's of there's obviously, Could

Victor Peng

still top and we XG, built long strong XG than and our say, forth. situation, of other Huawei term thesis you have take we trade this there, but the in and said remains a and if rest think on the fact drivers we everything main diverse I with. Analyst that Day step an impact have growth data really multiple The close and Lorenzo's automotive is all during Investor markets so of center, intact. still what back of that I That's guess,

it, the in next off thesis. and when should order I strategy for think of we investing we growth mid-teens and Nothing -- the really near term says the So we in think stay to in we get that said years. are about that investment five

essentially we our monitoring moving with still forward are So course but investments we're very carefully. of situation

Operator

question Next comes line Muse Your from CJ of the Evercore. with

CJ Muse

confidence gross gross And why get thought that's wireless, margin out, think also the And And I the a back lower? guess pulled in I then all lower, therefore, fiscal guided we XX% second but margins you guided the at territory that question. Revenues gives what of our the midpoint modestly mix Huawei that can particularly in that to half getting if margin gross was the year? headwind. lower.

Lorenzo Flores

couple CJ, of So points.

case, How that First gross the that gross also to I business clarify margin. quarter-over-quarter. the the asked. a relevant to benefited AIT, mix flat look said is would that non-GAAP what we generally slightly. margin due non-GAAP should decline, it, didn't say I'll basically which said I you more in we part that it of also has have in is our question say if should becomes this And at the significantly, I about gross see should I wireless you margin is is said grow to And albeit going guide

those result of the Does that So mix help? factors. is a

Victor Peng

whole. that, is it's the isn't a little add just a being Huawei [indiscernible], large also that sector wireless I Can as it more

it's wireless so still down bit, is while a part. And pretty meaningful

then the segments. we of said I meaningful other to the we have other way isn’t about think still Lorenzo issue, Huawei part the wireless that and the that's think I think -- it, just it So very business really

Lorenzo - A Flores

QX despite clear. prepared Huawei I increase is going wireless to wasn't to slightly. business, gave shipping just from remarks When I case restrictions, So QX my in

Operator

question of Your the next BMO. Ambrish from comes Srivastava, line

Ambrish Srivastava

one in additional just What if investment traditional the of storage -- provide back for last I is which given now clearly to this then that because is winning? But to well the which underpinning the you businesses was guide supposed expect such years think uncertainties? of automation even old I rough was up at the for quarters. us big big numbers a Day. for wanted full the the breakdown think given understand get you new were driver, be -- for I workhorse case that Xilinx, now? the do makeup Analyst Could to as as you the you of have willing reiterate, the to not stick plus growth table This off that's Victor, the biggest versus year the and XX% about you underpinnings And just to that, you're datacenter. to three able Are with of XX% Thank you. a servers, to your the you the of business, datacenter, Xilinx. or

Victor Peng

traditional is but I that that we some give aware as production FAF. had on -- again What going their of been wireless So business. Huawei, as in is significant following, to Lorenzo with is business, tend I new. to detailed first cloud everybody would clarity the is actually think you versus say part a about And business they

able ship the one some quarter hits So FAF. additional of the as to we for an were do said going to we deployments, they was big weren't

not opposed transition to traditional, are in both businesses interesting new And storage acceleration Lorenzo kind of businesses, a again, as really business. second, business. memory on expressed, those the was a The of significant as good

opportunity to our that Yes, I sticking see an what if but that only was On course. To aggressively. again on growth we're this drivers. to is since say your very, big. to our just our And opportunity still we look, big can that it's get is small. and one re-guiding I see to would is apples not the it a our to basis, of going I thing we're say very that, drive broader going obviously, to right. can percentage question we business, -- an want you're the after growth wasn't of be guess going still year one do there. We're basis, so -- around, We're

stay to tuned QX. again, So

then with in And But double-digits, in actually one we you to because QX asked backlog. ship factored we're thing is and we're this. to going we that bounce strong other We've already back the Huawei. didn't confident can't -- we see explicitly that

is So there, in that solid couldn't backlog. and the downside that see we we have predicted

you and… have between do new Lorenzo, approximate So the

Lorenzo Flores

But this want almost No, you if historical -- alluded tell you don't don't as go is QX the I on is, what can fly. actually QX, center business, handy. And make stuff. the to I that the on new Ambrish, from if business up core I cut have to entirely data helps I it get we will. to, that we the growth can Victor back to you,

that. Sorry about

Ambrish Srivastava

much. you Thank very worries. No

Operator

Curtis next Your the of from comes question Barclays. line with Blayne

Blayne Curtis

backup. my wireless Hey, guys, on two see, We for taking Maybe thanks just side. we'll related the guided question. did

You're in levels Huawei. of to that some back peak portion close without, I guess,

never So of could the is to a of some comment on I look geographic you you as if way comment on then curious Asia I'm well. could I up but revenue know just great strength? of was big. wondering that was at, kind And breakdown if

Victor Peng

mean, everybody ship And ones continue ZTE last that year the other And the key Huawei that not as that's that's well as we it's in to all is -- important but to Korea But not started changed the to like strength wireless. I speaks we qualitatively, there. is so Huawei hasn't Obviously, to, the to the is remind for think deployment and over. customer big I no again speaking of -- which overall impact. that strength really of the us just our we happening. isn't just this thesis XG as all players I'll think I a XG, and ZTE. had again ship

seeing So really that's what think you're I and…

Lorenzo Flores

end as We less driver. markets the growth I see in primary maybe in And Asia Asia. did significantly overall impact. with we think that story in see strength industrial important did aligns some

Operator

John Pitzer question comes from of the next Credit with Suisse. Your line

John Pitzer

slightly, guide headwind September for wireless second up Huawei. radio understand curious kind Or if just base growth? with the to that factors the from to I'm up coming relative ASIC ASIC of about just band in I as displacement be Victor, headwind the your ability business should how half more And a bigger becomes a grow the the year? the to of fiscal displacement is we in as think something that sequentially? we see headwind,

Victor Peng

ASIC remarks, in as bit I being Investor and a my displacement, the as in we opening more so said that's far the As at factored would inside Analyst Day. what shared little though that, we what and we do is

So I that we've in on to-date we but put that it the of say think are pass, fact it's way. are that going no would when planning that we seen we displacement. to still that terms let's will see some not change that's we

Lorenzo And after first factors the that means will that, than that we quarter. half the the close of Again, in feel half, do we displacement. will this you give ASIC but as be so also any second detail said, the still stronger that

Operator

Bank. Deutsche Your Seymore with line Ross next comes the of from question

Ross Seymore

to to Let I me want go AIT segment. a question, the ask

or that basis. than was if parts moving fall in I benefiting that guide, But build You put parts substantially gave a September little there to inventory why the quarter? like was on a seems that Was it of I some June the all bit off sequential dynamic, it two the quarter that. on right an color has better was inventory expected. that pretty in see there to In wanted

more a little segment? was happening that about just guide what's if in I there So September the for color to see want

Lorenzo Flores

of significant the history. in strength into piece we will. There was me some and cause Analyst industrial we've in QX at incorporated whose relative the this aware if in inventory Day, guide, pause the low timing in as would to program with let start their quarter In of were a in even very a year QX, you fiscal this we smaller double-digit million, said went build what customer in revenue. So,

that's a part the the in So, significant TME of and factored is business specifically. in decline

Ross Seymore

that Is that something next the back in bounce quarter? will

Lorenzo Flores

the year. it half expect back to of bounce the We second in

Operator

SunTrust. Stein line the from with comes question next of William Your

William Stein

this for bunch customers thank from if a into well, and the of Great, you can't almost dig buy hoping can we're XG you're shipping I'm like, that there. vendors my market, a buy The from question. taking other there's our sounds little to ways describing them bit. it Huawei, and they dynamics

ability misinterpreting as so, as their trends And what it's hear that your customers' Thank to and it. or ability to demand the almost I'm and you. is regard? comment you at I'm performance you surprised adjust that telling But your to easy. switch maybe and though to about carriers their rather customers, And customers maybe can in are

Victor Peng

phases. the We're we're phases the we initial the XG. no, think it's the that. and about maybe deployments early in we But were multiple at a that, that think is first way to trying phase we convey and of phases in So, like in -- not see better do believe I just I all first think, remember, But don't initial can of not they just the -- swap. initial to the

is know, it's relatively and not the really but change portion China And first some the we're There's market, vendors big as I phase that is then no thing. think Huawei other what get seeing that of you much in qualitative the change. are very for to modest. players ZTE,

affected, And not course, the other China, that. everybody's points rolling outside are through of

have visibility your in point, trade just swap. can't, with We we deployments aren't situation what's great And to it's happen know saying that to just happen don't just Obviously, thinking to because to like China. can so and what's going everything you not we forth. in going later

don't and to subscribe that didn't perspective. we we to no, imply yes, that So mean

William Stein

I impossible you speculations up built years, products? have as to of I any inventory in. misunderstood, heard perspective has if been might a build Do up Perhaps me. two much as follow to squeeze Huawei's potential speculation they a There Huawei could. have can lot that on more of which We've seems

Victor Peng

reiterated, exactly that, do can't And XG, advanced do Analyst buy there's not. absolutely what I we're we to Day. not our from need perspective, that. so question can't see most other part, our mean, know do you so We do to speak just not we anyone multiple sources. the parts. because adamant through why at we we had times absolutely the know that that we you else's I going And And

rates. -- So about inventory very build is that we're even near confident no there any

Operator

Your the from line Gerra Baird. next question comes of with Tristan

Tristan Gerra

quantification from Looking China ASIC. a your of band Are look at we to How terms at a magnitude the you should average displacement Any in of content in large base at on your FPGAs maybe we of average potential trajectory us. per looking a year base customer? the cut XX% could station against now? give

Victor Peng

Investor through our in walked as best we think that and we can. Day, Analyst I

I attempt to through want go don't try to again. So and that

were take vary if degree. case -- okay, by in the trading In not if shared it and content then China nothing just can't how it's Analyst from does off, the of Huawei, I of them. there's So well. different Day. what it's today not exact would value we It's as say details we the a the about feel The about those ship Investor then matter and we you we're the systems, OEM to like, at of them shipping that

We've So the that about think including difference again, there's factored no would content, I say just ASIC really broadly displacements. and we that in. summarize in how

Operator

Toshiya question Hari comes of the Your Sachs. from with next line Goldman

Toshiya Hari

you talk was could Victor, the more little automotive about a business. bit hoping I

weakness do same trends separately, Any beyond? And wins on September year-over-year have accretion relates over into for guys some and you unit hoping there to I the gave fast What's details But the you mentioned the talked you. the to Solarflare. Day, you or two. those does could that was given basis? the the the some about next as ramping that think was how a outlook And I You changes business and again NGCodec. at quarter grow automotive? the the in outlook Analyst Thank then market. of for design it guys in year

Victor Peng

the then speak take Lorenzo, me to Let auto one and part. last perhaps, the could

whole So the they I shipped -- of there And China. softness lot situation, a in is said, lot heard have broadly, people to a into think that, the correlation of market. China think there's as that and businesses there's auto Lorenzo because I

production. in some things we So fact the there issues slowdown in the caused that some are have that has

that fully systems, you we in very the a we Nonetheless, future how new obviously, systems see segment of with at as in to That to that's Now, that into full in Analyst in-cabin kind being of what's growth no Very but so systems feel we're and do softness. as driving, about of production. we new the investing already ADAS, occupants still that's change, momentum. broad continues next too if autonomous growth what trends is and addition continues terms new good moderated. lot Day at everybody's in and expect designed well look for that in generation talked

Lorenzo Flores

growth. is take impact and I'll greater lower in the autos what selling we auto. lower customers asked China from that business seeing the drivers one would did quarter we're X% China I last a to what of longer the our Year-over-year, two you than outside expected of performance. bit on the previous was It and little was grow. trend. And of, about fact than expected had term do than for see the the appreciate growth you this quarter we characterize

the trailing you XX more maybe auto prior versus importantly, we our growth percentage months, business. the XX months double-digit And see take in if trailing

still time. trajectory NGCodec relatively course there we transaction. And over a is then the strong immaterial of So, see very growth

highly the providing very did, good you So for. we're asked that a accretion team. IP assessment get qualified that But not we transaction, very, in

pleased we're really that. with so, And

Operator

the question Your next from Raymond from line James. of Chris comes Caso

Chris Caso

comments there. because on think return in all of reduce reliance alternatives to could choose I And situation to would to risk to some going And do suppliers? either U.S. if long-term based they are customers' reasonable that you? that's about the What one ship get your of with wanted the parts provide the imagine those have event in the you? to your there question you're threat for can't trade that's shipping a long-term, I mind. there alternative to or things that over their components in their they and is, XG on competitive that be out of you in And you advanced some that of earlier what what's

Victor Peng

do Well, don't any has everybody a insight. quite ASICs, and as a in they I they -- that I really high Huawei was near-term, guess have silicon subsidiary bit. use the their them knows, of

can't is you the some prolongs, speculate you're what situation exactly because they change into quickly, like what on not happen want just imagine they that will which don't I this if That So do. ASICs. But I lean ways, to that when architecting use, already would it's they could dime.

In end and terms if doing watch if that replace all approaching they're in of anything -- very China, could we other us replacement, you you're referring companies like XG. in replacement. domestic things and our low certainly you say didn't but to, not Those this,

I that's out. far So think fairly

whatever, do the In don't I other speculate. I basically replacement said, really focusing would see for terms with of ASICs just than rather But I or more. again, to as want on they don't how strategies near-term,

Operator

comes question the Rolland SIG. from line of next Christopher with Your

Christopher Rolland

On geos what I any or Korea seen and you've seen think popping bit you in have China. yet Japan and a pickup really, America, guys perhaps anything a in XG, you you North can of of? describe other But covered ahead

Victor Peng

different will Japan mean, that be see it than slower, has -- We anything that. see the thing we traditionally, than North seen after start. moderate then little probably what Europe in little but of that, moved will what first bit I geographies and we going is a happen, don't Yes, America, we've to more going. a two believe

don't see something we So imminent. really

a outlook is certainly there Although, activity, that's of so our lot moment. the at

Operator

from You of David next Wong question the Instinet. comes line with

David Wong

product provides to Huawei Department as when for a any applying wants to the that remaining guidelines the Commerce expect licenses of were there ship you decision? to for that licenses Are mentioned might you them. be You types

Victor Peng

additional because the been that can certainly all What products. change begun the Again, what things ship. all overall applied them, we to have, no to is licenses Two we've feel products, security. shipping respect we again, of recently restrictions there's legally for licenses even but not we've national remaining clarifications. wasn't security, just with some with to that we restriction the It the

what can we'll assuming we just for started the that guidance midpoint QX is Lorenzo just for shipping, So what we estimate things our is it's and of that ship. was our express, that's to that trying continue to the ship

have in approval to get upper the getting approval it of all that we certainly so and additional enough, is get And is days. we and in happen have are responded put departments the us in would products. with uncertainty meetings weeks. companies of there's might But but course, we the has things there in heard various around And government, product, on licenses. may not that there have And that to in been to were some going the you those that then soon terms a though, The expediting end for nothing some been has usual require sooner that range than of shipped, of some and saying queue. be course recent by the as read much have have still was no XX idea typically when specific circumstances, administration dynamics these But that. what we matter of given

Operator

our next the Citi. of Chris And comes line question with from Danely

Chris Danely

quick two Just clarifications.

products like just the do So you're you memory And think having then is in the lost trying you business. the data group? some transition the center big can't that's much ship? Victor, one forever, customer you How restore business how gone was can't Huawei of you said that of to

Victor Peng

one. So to the let talk me first

will And something just again or to certain said, things happen, I lose. in We dime, my I resolve in quickly long up going two to up that's If give expressed comments anything they're don't important they've hope prolonged In XG. I completely on we've could as as certainly think certainly some architected lost dime. hope or results. a on of again starts we've which going we anybody isn't could way these on just that complete that give that as not on will So, would got have one that going a replacement Because then, really time, possible. case this that just business. And we for very they've just well. issues not that we certainly period which a change that a they're which to as

again, think, applied revenue majority the have had guide if got look less still had than we That's about at have, I you you we for that's and expected occurred. everything But have understand it, continue what in half the we vast Lorenzo if if the of you ship doing. what the Huawei we're license would if meaningful, if of to we even help you think what to nothing guided for we

the XG other So for that were that that very tells you that, Huawei things of meaningful and course, doing us.

Lorenzo Flores

say Chris, the customer. significant which number disclosed, will data is for you is we very as overall question, related memory the specific just than your to a XX%. because in business, The last part Clearly, I less relation won't they're we've customer. small give them, on center that relatively a of

Operator

line with next from Your comes question Mizuho. Vijay the Rakesh of

Vijay Rakesh

to how Just base business, from coming to And on the some growth, your Huawei, wireless nor if you're us growing say Thanks. QX Huawei. down? your ASICs give not that exposure color despite that good you band see also is to despite X-nanometer your on growing but could is wireless also, ramping? going, Is you're fair QX it just Versal

Victor Peng

to know And we always I lot around whatever band, the really say replacement in is of of even see is would I changed. contemplated is really would has it's base way again, questions the there's business thing. what that. designed XG on I -- So a kind we think there, the not Again nothing in would that of -- that Huawei it licensing,

there XG. is it's band So wireless base the just Huawei not -- it's just question in

that's With respect to Versal, actually really well. going

we As already leading we customers. the sampled very said, to

this so We quarter the for will designs. Obviously, sampling where the just hundreds of have literally expanding already ready software throughout forth. ship we and and early whole be in they're people initially program access using getting

rock silicon solid. said, testing is really I As

good. So excited, has we're been very feedback

will period. that, of still is so I this course say sampling --

platform So going level, of that. terms in Until in But we next revenue. modest. the shape, revenue our and see to to about FYXX, excited will meaningful very not good very go in be production taking in we're you're momentum really

Operator

of Your line question Bolton Quinn comes Needham. from next with the

Quinn Bolton

fiscal Day, now Just you out clarify, talked year WWG of ASIC into you the of coming think basis a this to evening be think despite the I Huawei WWG second second think on said Analyst wanted you to the up flattish being to I replacement. half shipment call, had on would half the ban. incorporate in quarterly that down the about the But

now to days than did in I better business base So ago, XX something? just or just trying wire comments. Is reconcile those the or XG miss

Lorenzo Flores

this specifically may say didn't anything half form call miscommunication. have there Quinn, of on We trajectory. about been wireless second some

to reserving are larger months few get next We clarity the the trade situation. much Huawei the and on situation more

So sorry, a if there there… miscommunication was

Victor Peng

the something this, the qualitatively second give this of by will fiscal again, we stronger. -- we place we we you we believe of deal half say you said that we have speculating. expect after I just overall we'll whole to our our part is in honestly, second licenses the we -- the way all half, did The put could which What second think business albeit it and that we hope we business close the which which half is as get we're be. because we'll it's Huawei And obviously get then shipping to still all strong on will clarity these better as And resolution said. that be discussed. not now, of year of Huawei going moderated we in But seeing to and without be what give resume unless it's be full information we in

Quinn Bolton

you. thank Okay,

Matt Poirier

And please. going we're more question do to operator, one

Operator

And so comes last your from Ramsay the question Matt with Cowen.

Matt Ramsay

ask the to much in wanted a on picture and Versal I product to very squeezing for sample here quarters. Victor, ACAP the you're coming as potentially you starting Thank me in. question bigger ramp

of funding you NRE the any engaged guys and scenes that I new you. engagement? Any depth will that Just first Thank and around of give you little the the think built us you level the helpful. ecosystem in? be context bit engagement the the around product, have you maybe really software might the environment If a context Do have the software customer behind breadth for software of software platform? are on

Victor Peng

and disruptive very product good very a it's a that's powerful. Obviously, Yes, question. it's very

bring the to software the need do along we tools along So with.

will we're my just Versal. to going XDF, we in do, course to in new details. but it That to said software at October are, announce But to I I environment. development As you're isn't with for hear and as Versal of comments don't want previous going forward going so go

going improve to user we've And to we invested make developers. and accessible a going more more to and lot significantly in -- are the we it, it experience are

are we investing lot. a So

libraries, We just other other driving and our are optimized libraries IP run things in of in time. and things ecosystem doing internal around beyond also terms

it's good So, a play.

is We are It lot. that hear investing more important you details about at a XDF.

So hopefully, stay tuned. you or that make can

Matt Poirier

joining of this today. for our have Well, And playback Eastern our Web of thank at us today. copy a X:XX Time We'll Investor site. you for release, call Pacific, a p.m. p.m. beginning please X:XX Relations earnings visit

quarter release year October date close. of earnings fiscal second the for XXrd XXXX after market the be next Our will on Wednesday,

quarter, Xilinx the San also much Xnd This your you forward we Xst excited during there. we that seeing And Xilinx and thank on note many for on you are will look be of completes KeyBanc Conference Please Investor October in be very the to our August Forum call participation. attending to our and Developer's Jose, XXth. very to hosting

Operator

your thank Ladies for today's conference This conclude and participation. does call. you gentlemen,

You may now disconnect.

Xilinx (XLNX) 24 Jul 192020 Q1 Earnings call transcript