Analyst Conference Summary


conference date: July 27, 2016 @ 2:00 PM Pacific Time
for quarter ending: June 30, 2016 (first fiscal quarter 2017, Q1)

Forward-looking statements


Basic data (GAAP):

Revenue was $575.0 million, up 1% sequentially from $571.1 million and up 5% from $549.0 million in the year-earlier quarter.

Net income was $163.0 million, up 12% sequentially from $145.0 million, and up 10% from $147.7 million year-earlier.

Diluted EPS (earnings per share) were $0.61, up 13% sequentially from $0.54, and up 11% from $0.55 year-earlier.


For the September quarter (Q2 fiscal 2017) revenue is expected sequentially flat. Gross margin near 70%. Operating expense about $230 million. Other expense $4 million. Share count 266 million fully diluted. Tax rate 14%.

Conference Highlights:

"Sales from our 28nm product family achieved a new record during the quarter. Momentum from our 20nm products continued to be strong, with sales easily surpassing our $30 million target. In addition, 16nm products continued to gain exceptional customer adoption with all three Ultrascale+ product families shipping to over 100 customers in a broad base of end markets," said Moshe Gavrielov, CEO. "Profitability was stronger than expected during the quarter."

Revenues by end market: Communications and Data Center 44%; Industrial, Aerospace & Defense 39%; Broadcast, consumer and automotive 17%.

Advanced product sales hit a record and were up 60% y/y.

AMD, ARM, Huawei, IBM, Mellanox, Qualcomm, and Xilinx, joined forces to bring a high-performance open acceleration framework to data centers. The companies are collaborating on the specification for the new Cache Coherent Interconnect for Accelerators (CCIX).

Xilinx expanded its 16 nm UltraScale+ product roadmap for the datacenter, to support High-Bandwidth Memory (HBM) and CCIX.

Revenue by product type:

42% Advanced products: UltraScale, Virtex-7, Kintex™-7, Artix™-7, UltraScale+

58% Core products

% gross margin sequentially from 69.2% due to

Cash, equivalents and long-term investment balance was $3.5 billion. $1.0 billion long-term debt and $ billion was current debt. Operating cash flow was $339 million. Depreciation $12 million. Capital expenditures $21 million. $100 million of stock was repurchased. Stock based compensation expense was $29 million. The dividend payment required $83.6 million.

Revenue by geography: North America 32%; Asia 40%; Europe 19%; Japan 9%.

Cost of revenues (GAAP) was $168.3 million, leaving gross profits of $406.7 million. Operating expense total was $220.5 million, consisting of: research and development $136.1 million; selling, general and administrative $83.1 million; and amortization $1.2 million. Leaving operating income of $186.2 million. Interest and other expense was $4.6 million, and the income tax provision was $18.6 million.



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Disclaimer: My analyst call summaries may include both our condensations of statements made by company representatives and my own analysis. They are not covered by any warranty. I cannot guarantee anything said by company representatives is true. I try not to make errors, but it is possible. Before making or terminating an investment you should always verify any factual basis of your decision.

Copyright 2016 William P. Meyers