Apr 25, 2018 • 05:00 pm ET



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Good afternoon. My name is Jessie, and I'll be your conference operator. I would like to welcome everyone to the Xilinx' Fourth Quarter Fiscal Year 2018 Earnings Release Conference Call. (Operator Instructions)

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

Rick Muscha

Thank you, and good afternoon. With me are Victor Peng, CEO; and Lorenzo Flores, CFO. We will provide a financial and business review of the March quarter, and then we'll open the call for questions.

Let me remind everyone that during our conference call today, we may make projections or other forward-looking statements regarding future events or the future financial performance of the company. We wish to caution you that such statements are predictions based on information that is currently available and that actual results may differ materially. We refer you to the documents the company files with the SEC, including our 10-Ks, 10-Qs and 8-Ks. These documents contain and identify important risk factors that could cause the actual results to differ materially from those contained in our projections or forward-looking statements.

In Lorenzo's prepared remarks, he will make several non-GAAP financial references. A complete reconciliation to the most directly comparable GAAP financial measures can be found on our Investor Relations website immediately following this call.

This conference call is open to all and is being webcast live. It can be accessed from our Xilinx Investor Relations website.

Let me now turn the call over to Lorenzo.

Lorenzo Flores

Thank you, Rick. Xilinx booked a record revenue of $2,539,000,000 in fiscal year 2018, up 8% from FY '17 and at the high-end of our guidance we provided at Analyst Day. This revenue growth was driven by our Advanced Products, which grew 28% over the previous year and broad-based growth across our end markets. All end markets outside of communications grew in fiscal 2018. Gross margins remained very strong throughout the year, averaging over 70%. Operating margin for the year came in at 29.3%. Excluding the unusual costs associated with our executive transition in Q4, our operating margin exceeded 30% for the year.

For the fiscal year, Xilinx generated $1.99 of GAAP earnings per share. As we noted last quarter, the impact of tax reform on our earnings was significant. We also had the expenses related to our executive transition. Without those items, our EPS would have been approximately $2.72 a share, a growth of 17% over FY '17.

Now for the March quarter. Sales increased to a record of $673 million as we exceeded the top end of our guidance range. We are up 7% sequentially and 10% year-over-year. Our revenue was driven by broad-based growth in our Advanced Products, which were also up 7% sequentially and up 28% year-over-year. All of our primary end markets grew with particular strength in industrial, aerospace and defense.

Gross margin for the quarter was 70.7%, in line with our guidance. Operating expense was $286 million. Core operating expense, including approximately $33 million of