70 percent revenue from Advanced products
Revenues were $756 million for the fourth quarter of the fiscal year 2020, up five percent from the prior quarter and down nine percent year over year. More importantly, 70 percent of revenue in FQ3 2020 and FYQ4 2020 comes from advanced products, while 30 were core products. Think about how its Advanced products are fitting to ACAP adaptive compute acceleration platform vision of CEO Victor Peng and his team. It includes Alveo and related products, UltraScale+, UltraScale, and 7-series products.
The core products that still account for 30 percent of revenues include Virtex-6, Spartan-6, Virtex‐5, CoolRunner‐II, Virtex-4, Virtex-II, Spartan-3, Spartan-2, XC9500 products, configuration solutions, software & support/services.
"Despite our fiscal 2020 being uniquely challenging, particularly related to the US trade-related restrictions with Huawei as well as some COVID-19 impact during our Q4, we were able to deliver another record year with revenue of $3.16 billion, a 3% increase over fiscal 2019," said Xilinx president and CEO Victor Peng. "The strength and diversity of our business were reflected in the results of our fiscal fourth quarter with strong sequential growth in both revenue and profitability."
GAAP net income for the fiscal year 2020 was $793 million, or $3.11 per diluted share. Non-GAAP net income for the fiscal year 2020 was $853 million, or $3.35 per diluted share. GAAP net income for the March quarter was $162 million, or $0.65 per diluted share. Non-GAAP net income for the March quarter was $193 million, or $0.78 per diluted share.
The Xilinx Board of Directors declared a quarterly cash dividend of $0.38 per outstanding share of common stock payable on June 3, 2020, to all stockholders of record at the close of business on May 13, 2020. The declared dividend represents a 2.7 percent increase over the prior quarter's dividend and reflects Xilinx's commitment to growing dividends.
US market growth
US market share in the Financial Q4 2020 grew 27 percent year on year and 37 percent quarter on quarter. Asia Pacific's market mix decreased to 19 percent quarter to quarter and 28 percent year to year, mostly due to the Huawei – China trade challenges in the last financial year. Europe accounted for 18 percent of revenues in Financial Q4 2020, and Japan was eight percent.
Massive AIT growth
Aerospace & Defense, Industrial and Test & Measurement (AIT) market in financial Q4 2020 accounted for 50 percent of Net revenues by end market a 30 percent quarter to quarter increase and 15 percent year to year.
ABC (Automotive, Broadcast, and Consumer) in fiscal Q4 2020 accounted for 16 percent of Net revenues by end market a down 13 percent quarter to quarter and up two percent year on year. These scores were mainly related to China's slowdown in the automotive Industry in financial Q4 2020 when China went through ashutdown related to coronavirus COVID-19 related problems.
The Wired and Wireless Group in financial Q4 2020 accounted for 24 percent of net revenues by end market a 19 percent down quarter to quarter and 46 percent down year on year. The company saw this market recovering in the optic wired market, and the 5G infrastructure market grew slower than expected. With the recent announcement of the Samsung and Telefonica partnership, these numbers are expected to increase significantly.
Data center growth
Data Center Group in financial Q4 2020 accounted for 10 percent of net revenues by end market - a 14 percent increase quarter to quarter and a massive 77 percent up year on year. The percentage indicates that the ACAP strategy is growing and that data centers need and uses more and more accelerators. The execution of 7nm powered ACAP smart adaptive hardware is expected to continue in the overall data center market.
Xilinx's CEO, Victor Peng also said that Covid19 will make any financial prediction for FY 21 hard. Still, he also reassured his employees that there wouldn't be any workforce reduction throughout the year. Global workers are staying at home and don't travel, while workers in China have just started working from offices.
Xilinx hardware powers ventilators and ICU beds
Victor also mentioned that some critical medical devices, including live-saving Ventilators, ICU Beds, and Respirators, do use Xilinx technology.
Twenty thousand people downloaded the new Vitis software and there are 1000 partnership with independent software developers and growing.
"There remains a high degree of uncertainty in the global business environment given the impact of COVID-19 which creates challenges with visibility beyond the near term. Therefore, we believe it is prudent to provide only quarterly guidance at this time. We will continue to closely monitor business conditions. Lastly, I want to thank our employees for their continued focus and commitment in these challenging times."
- The Data Center Group (DCG) delivered 22% revenue growth over fiscal 2019 driven by increased adoption with hyperscale customers across compute, networking and storage workloads. Pipeline for new opportunities in compute continues to show strong growth for video, HPC, database and fintech. Leveraging the Solarflare acquisition, Xilinx shipped Alveo U25 SmartNIC, the first internally developed SmartNIC solution, in the fiscal fourth quarter and is being evaluated by multiple customers. SmartSSD is also gaining traction with Tier-1 and Tier-2 hyperscale customers. Xilinx now has over 10,000 developers trained on Xilinx software tools, including Vitis, nearly 1,000 ISV partners and over 130 applications published for Alveo.
- The Wired and Wireless Group (WWG) delivered relatively flat revenues, down 1% vs. fiscal 2019, despite facing a highly challenging business environment related to trade restrictions and an industry slowdown in the ramp of 5G. Xilinx continues to maintain strong engagements with global OEMs across a variety of deployments and applications. Xilinx recently announced a strategic engagement with Samsung on a second generation 5G radio design that includes beamforming technology leveraging the 7 nm Versal platform. Adoption of Xilinx's RFSoC products also continues to ramp with key wins for DFE applications as well as for O-RAN deployments, as recently announced with Telefónica.
- Revenues from Core Markets Group grew 6% year over year, showing the strength and stability of Xilinx's broad and robust end markets. Aerospace & Defense, Industrial and Test & Measurement (AIT) revenue grew 5% annually, driven by solid Aerospace & Defense performance. Automotive, Broadcast and Consumer (ABC) markets delivered 8% annual growth, with strength seen in all end markets despite headwinds in fiscal fourth quarter from COVID-19 impacts. Zynq adoption remains strong in Automotive markets with broad utilization in ADAS and infotainment applications.
- Xilinx is committed to doing its part in fighting the COVID-19 pandemic. Xilinx has been working to support some of the largest medical suppliers in the world, such as Mindray and GE Healthcare, to supply critical technology to test and treat COVID-19, including helping to power ventilators, patient monitors, respirators and patient ICU beds. In addition, earlier this month, Xilinx donated $1.1 million for COVID-19 relief to various global and local health organizations including the World Health Organization (WHO) Solidarity Response Fund, The University of California, San Francisco (UCSF) COVID-19 Response Fund and the Silicon Valley Strong Fund. Xilinx is also matching employee contributions to various relief efforts.
- During fiscal year 2020, Xilinx returned approximately $1.58 billion to shareholders. This included $1.21 billion through share repurchases at an average price of $93.73 per share and $372 million through dividends.
Xilinx expects $660M - $720M revenue in Fiscal First Quarter 2021 GAAP, gross margin of 67 to 69 percent, operating expenses $312 million - $316 million, other expenses around 13 million and a tax rate of eight to 10 percent.