Xilinx (XLNX) 21 Oct 202021 Q2 Earnings call transcript

Good afternoon. My name is Rob, and I will be your conference operator. I’d like to welcome everyone to the Xilinx Fiscal Second Quarter 2021 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. your time one, to limit management ensure Please adequate has speak Instructions] questions to to that [Operator to everyone. like now Matt would to call the I over Poirier. turn to Thank you. Mr. begin may Poirier, conference. you your

With Xilinx. Thank you, Brice CFO. a of recognize We potential are number Peng, have a reports CEO; Hill, been me there recent and and Victor M&A afternoon. good regarding transaction with

to them, that is recent on neither and comment discuss respect about M&A policy topics. questions questions that by abide rumors to to would limited reports. we of and policy quarterly purpose will to Our answer we is outlook, The today's these these with nor be ask results call and most our

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

related non-GAAP acquisitions. as and in supplemental items, analysts financial measure for facilitate used earnings these analyzing release the sharing certain of information A core ongoing business. business helpful non-GAAP the In addition reconciliation We results. our our accessed non-recurring Relations measures of certain webcast to and be GAAP believe the is in unusual call investors to these excluding to included the company’s that GAAP is financial provide and measures items for intangibles of period-to-period on of financial be continuing to disclosing to will effects is measures we financial Relations evaluating Investor purposes posted all our website. management website. conference be one-time from We amortization Investor to such open has been measures, operations, can being and by Xilinx by non-GAAP It and comparability will evaluate This live. closest company's

Let over me the now call Victor. to turn

Thanks, Matt, and are for families today's you healthy your joining thanks and well. to I call. everyone and hope

discuss now how operating me with ongoing briefly Let touch I the on the COVID-XX challenges we're business. before

where from Our eight have Most job approaching much in except development China And supply been our an on allowed we've our our to to return are home, teams activities for delivering and executing without Overall, continued our employees disruption. to continue largely working despite of from doing to home. and strategy, have work outstanding chain employees of customers. progress continued months work.

highlights. the the Wired higher In better the to revenues performed grew QX of our quarter. X% wireless midpoint slightly were record AIT on better-than-expected business sequentially. sequentially than revenue than DCG businesses, had Now a grew and and were core expectations. Fiscal $XXX revenues and million, guidance.

lower-than-expected from somewhat showing XX% the revenue, increased recovery. to The of ADC constituted total XX% emulation company better signs shifting QX. prior category with offset revenues but the revenue Zynq-based revenues. were TME of expected, into expected, compared business quarter as significantly XX% advanced auto to strong was than business the of due A&D products Our some revenues. performed and

our our future. larger in that overall continues portion SoC across Zynq design be of the confident will strengthen And Our target a to business we're revenue momentum SoC market. much

a significantly design $XXX and won due Tier during Now growth. million revenues realize against well the expected provided including Cloud to to continued our U.S. other top several X to players, first I'll hardware annual of clusters, value with over service adapters compute deliver DCG deployment to highlights we crossing capabilities with the stronger in acquisition. win starting $XXX market specific FY strong is for This hyperscaler. software revenues business the QX, from win Alveo-based adaptive with in of contributed a the mainly we the to customer Notably, AI SmartNIC move with DCG. Solarflare mark business time. on saw by marquee and unique our XXXX. SmartNIC our grow this growth million We quarter traction Solarflare in our DCG NIC

other design compute in have hyperscalers In trading exchanges. engagements server, win and customers interest with in acceleration, XXX-gig an we customer SmartNIC activity. great RT engagements We video fintech see banking and engagements it's for proof-of-concept Turning solutions. and to and XXX-gig growing activities multiple electronic

next-generation releasing storage trained announcing have Xilinx of and over XX,XXX progress AI respect platform also in application had customers. with made To the since our our progress commitments ecosystem we community a account. we've late year. open development, growing XX,XXX saw and to the and it applications. XX list from on developer With and we've partners, source to have software date, Github downloads over Vitis We've X,XXX new platform software Finally, storage, of the last close AI developers examples, in

Moving to WWG.

is America. massive As from quarter. North These sub-six deployments our offered MIMO customers deployments significant saw of contribution rated ramping gigahertz in of a RFSoC expected, production Tier we X RFSoC one revenue that OEM this

We're design beginning further Versal to expect expand Our in X-nanometer ACAP, and see our in X deployment is also RFSoC who a for using globally. revenue growth XXXX. pipeline continues we revenues Tier win start customer to from

deployment the configurations. MIMO in XG are units, massive As radio to to ramp in especially in from increase more we geographies, deployed begins very well-positioned significant benefit

in We're this about upcoming these by maintaining meet customers to offering are SoCs for with and that in selected more and capability. also unique the and of the Versal ACAP We'll IP announcements. provide value Our our our industry. adaptive to unique our product share power products factor customization cost, hardening RFSoC our requirements while customers' adaptive leadership aptly details

since over years. We're space, several We operating see big openly progress working also made the opportunity stakeholders and key next to adaptable. ensure our with initiatives future networks in drive O-RAN developed Open-RAN great a to the and be where XG we

As I of the and to member mentioned Policy over specifications the contributed mobile both quarter, analyzed, we coalition for open-RAN networks. are XGPP and XG a it last

and telco and quarter, to card This identified Last empower and technology to massive our and front-runner a will products. than market with announced positive leaders Vodafone radio market hardware MIMO unit option. accelerate O-RAN for feedback units open products as in distributed for baseband custom customers capability interest get area and Customer with innovate RAN the promise units in unique other MIMO like networks. differentiated Zynq category Our solution this massive realizing a faster XG TX accelerated the the O-RAN. performance we virtual of for and in Mavenir. recently solid to be continues enabled Nokia any

station In partner addition, company's strategic and for KMW base as recently a supplier announced that is equipment selective silicon the it business. radio Xilinx

markets. at Moving the pre to delighted now to resume employed that business our to say to close COVID-XX core growth. to level, I'm being we're very

know, overall our core markets are and business. you for resilient As diversified our highly provide a foundation

the consistent as markets Aerospace Our reinvestment Defense cash grew initiatives. record. quarter to in set our and core well new in significant support generation & a markets strategic as in business these provide and

see with budgets are adoption in and growth a emerging be Global from to trending secular increasing term business this generally of up, hypersonics expect long the technologies we defense and driver lumpiness some time We like AI. time. to

that in which quarter, the in industrial Aerospace quarter, emulation density count and highest consistent the the device market it's a last E&P data, XX-nanometer leadership with single is run built. UltraScale not is pre-COVID business recovery the remains leadership logic of VUXXP, With back rate. category. our the and in the XX product products. recently Kintex XX-nanometer recovering, saw VUXXP our prototyping During radiation IO VUXXP generation on in from and received strong. The to Platinum was Innovators the award is XXXX established the billion FPGA the The in collar our provides Honor very recent quite world's production. though Military the PMI We largest Technology which We a with FPGA announced auto over a the manufacturing Electronics sustains our Interconnect ever and our market transistors,

the trend in leader. with design-ins Subaru DMS, EyeSight in the System, Selects as as of Levorg a are its to to Xilinx debuting We we the expect Japan. well year. where had in continue ADAS into several We second New-Generation half this Subaru fiscal Power

offer control MPSoC Zynq adaptive to Our will keeping be their ADAS features next-generation systems braking, like emergency assist. and lane powering automatic cruise

our driving. leader world can radar has We production-ready automotive also their that support Level products powering autonomous Continental, in systems. X Continental the advanced will systems that to XD image radar first the be Zynq AMCs X with Level radar announced

recover to resume We robust expect as ADAS growth and of the continues to growth. market long-term adoption the industry auto

over let Brice. Now it me to turn

you, Thank Victor.

across consumer ramp our with revenue of end we of or of mentioned, strong with core a markets. products. decreased declined Across order total automotive line QX was have multiple during broadcast, Wired By As QX. significant with strength AIT come the the XG provider ahead revenue X% grew conditions originally RFSoC at network expectations. meaningful OEMs. AI XX% across $XXX wireless rebound encompassing restriction above quarter-over-quarter service specifically, with rules, recent the CIV-related quarter. and to on quarter-over-quarter markets. outperformance. our trade driven with and expected. X Victor X QX trade midpoint we most solid Tier ABC of an access revenue from build-outs well was provided resulted More our and XX% in the million, revenue quarter-over-quarter continued our the and by flat American in many strength a broad to as improvement of Without our ABC wireless, group would a end call at had XX% performed drove This decline revenue year-over-year, benefit Note, recent XX% previous prioritized business XX% additional Wired revenue market largely and the by and largely X% cluster was as while a guidance some a The due build-out improving group Tier driven strength Center XX% quarter-over-quarter driven multiple compute year-over-year. healthy our Solarflare expectations deployment and year-over-year, OEM business groups, our QX end Data sequential end North and a ongoing a impact of increased automotive, for and operator. restrictions. across which market, grew in cloud the seen of higher than with to markets, earnings X% we expected wireless in year-over-year, outperformance by the restrictions, comply DCG as in orders Wire trade ongoing with saw our QX In acceleration approximately we product

came performed delivered QX in while expected an and program than now quarter-over-quarter a AIT or during performance ISM extend results that industrial, measurement year-over-year increased defense, market QX. TME revenue and and in line and is end expected, less which test aerospace defense, performance and were XX% with emulation quarter. with as broadcast strong into Solid to started due expectations. aerospace customer X% expected record in to QX and

Now, income margin or was were were half profitability operating gross operating $XXX GAAP due some The increases GAAP high salary within toward our gross and sequential other our expenses primarily million by with was the revenue first range. margin July. Company-level end million of financial higher costs. and expenses mix margin. our by to and was performance highlights in of of operating XX% end metrics. Higher lower market GAAP XX.X% XX.X%. guidance bonuses $XXX driven of operating or guidance driven

driven was to XXX% and million amortization a Our approximately balance with income was investments associated cash million, $X.XX, tax with quarter-over-quarter M&A-related X.X%, to to On a GAAP fiscal non-GAAP Note, in stock and our $XXX Diluted is tax $XXX of QX and XX% at was cash the to increased by a decrease. lower was a million by X%, difference $XXX $XXX our million and the million, debt Accounts days, year-over-year. to $XXX decrease and XX in awards. and million year-over-year Note, days and of the net rate XX.X%, non-GAAP same diluted rate income XX% revenue. line XXX.X out sales XX% between flows, generated increase tax diluted earnings stood operating $X.XX, tax income effect non-GAAP prior share billion QX driven increased a related increase compared shares. income flow was cash vesting was total million in gross adjustments. was appreciating and and million, quarter. of count sheet decreased benefit XX% quarter in per is from net share total million short-term to to guidance. or linearity and tax basis, expenses days non-GAAP operating GAAP was flow On EPS primarily free quarter. XXX The our and of was $XXX days GAAP the expenses rate increase $XXX margin XX remains were XX% last billion. We $XXX as $X in $X.X of Inventory revenue $XXX days million shipments. or increased receivable and due of inventory operating cash quarter-over-quarter

share returned XX% we repurchases. quarter, Through million. the of we paid dividends of $XXX cash through XXXX, $XX total million the free flow During half and fiscal both or have of first dividends a of

the to fiscal Turning for now third quarter XXXX. outlook

to as at This XG revenue broadcast million approximately continue. and X% and expected X% in expected strength continued DCG end deployments WWG is reflects be $XXX led record and markets. up a and midpoint markets, QX by TME, be quarter third million, expect lower the is increase between and to year-over-year. is ramps core our after which auto $XXX quarter-over-quarter We to

into lower but medical should is PME AIT, end expected be is prototyping a Some strong science with are as defense QX quarter, record historical modestly expected fiscal sales to to and are decline Within a outlook levels. generally from in expected moderate line still to Industrial markets. revenues. quarter. seasonally our due to and increase additional sales color program by emulation Aerospace meaningfully and

are strength to general see by manufacturing Europe X recovery platforms at to ABC continue recovery, activity ADAS the driven demand are our our seeing where markets U.S., from and in in expected Tier auto, Asia. continue We in customers. we increased

decline live live election Our end is U.S. broadcast and a events, QX. other like sales to in DCG strengthen, to record the are increase. market quarter from also sports expected coverage, as expected

mentioned with other regions, continue restrictions. Non-GAAP across during related XX.X%. OEMs $XXX fiscal strength be million between to and QX and gross a Please of X% acceleration performance multiple is and X%. expected $XX the ramps the In be COVID-related As in some be to trade $XX to as previously, order from half slowdown to Non-GAAP across with modestly, DCG between our expense markets be closing, a wireless, by is Fiscal note, removed to we be expected Huawei up first has across expected in due reflecting the to in million completely expected to is continued transformation is between business is to tax XX.X% non-GAAP increase decline saw million. wire seasonality. company. and restrictions, strong XG of been a outlook business multiple between margin platform and offset expense WWG trade are operating in our $XXX end and business. XXXX, expected million. Non-GAAP pleased rate our the QX diverse

ASICs. deepening furthering compete and upcoming Versal, effectively and me MPSoC, RFSoC market Our opportunities technical as more ever the ASSPs now the set customer to are adaptive call served in the areas as the you. allowing confident our for both ahead and And by our and to We traditionally let and Xilinx, including operator us Zynq, market of leadership. SoCs, Q&A. in broadening for Thank remain us and turn

ask Please of welcome at one, of everyone. Deutsche to Instructions] your Q&A time from question. the end your there ensure are limit Ross for management from a to follow-up has question Seymore to If Bank. time that adequate [Operator The is And the line session, now extra to open the floor comes questions. questions you is first to speak

Your line is open.

of just side what question. about December in a the quarter ask but the I of surprises in ask quarter to it's AIT as going like forward. wanted because things. nearly going to grow me looked means letting in like for strongly, and some looks out it one it Thanks emulation guys. didn't the Hi, On side, the rebound it of the side

why but getting for to that September, great in side, color keeps by a restrictions. some on similarly, pull-in trade on guidance quarter pushed measure your it goodness And any that sounds the a like was data December out? was of any due So center then the

about would of any helpful. So color sort be that

Yes, let Ross, take that. me

the about and some over, So said, on different you just nothing what but we're as prototyping, emulation there. moved look, fundamentally revenue there's doing

As just a with I I a said leadership that now. years prepared have the It's anything into view customer. in particular remarks, ITP, read wouldn't with and established maintained several we really for beyond the that. situation it we've

This think saw But the as pull-in. of are an restrictions. center. guess quarter again, traction that data the recent a saying about you still that is Regarding because one really what I we're that think is data of I pull-in some can yes, that that good in big not thing. I getting we really order indication most say we And an would center, it's

Of without as the right it's consolidated business. -- course, scaling we of, restrictions. lumpy now still really perturbations in even new are center And kind Things general, pretty we're trade business. the data like a in also, said trade

So growth. some lumpiness. it's natural a tracking causing it have And quarter-to-quarter overall, we're some would But perturbations basis. just more good a still on

what's And on so still data going very about center. in we're confident

you. Thank

next Fargo. Wells comes Rakers Aaron from from the of Your question line

is line open. Your

question. Yes. Thanks taking the for

that Just did topic they months they we on more I the XG, XXXX. think the XG saw in stations all than of two announced last base morning of deployed Verizon this of on

that to you. And see revisit Thank the Xilinx? where expansion it and cycle general, can as we about or we this XG? context content guys just means how of see how in should that pace in accelerate, in the start just the for you So of progression you what think

Yes. it's Yes, Aaron. good a question,

to see in things one pleased deployments America. starting the said, deployed is sub-X And in we and RFSoC about more the of being our really also see we're North we're around world. you As

very we we're seeing very, that are So excited ramp. that

and the in this opportunity us. previous in few back I think is But trade in some be the other with absolutely perturbations. very are things, particular, big caused we for just going that's confident like right, still picture, if a you significant a question, XG, step to

had. We we the ever lineup strongest have

We have XG. for Versal win

be areas. with about further doing RFSoC family what RFSoC the in of terms the in hearing the announcements. you'll have And even we're deployed We more

it's yes, So, the still wave. first

right first starting as geographies generations America because pick North is going with heard talked trade the now me we deployed China still that that we And engagements You've then least continues, about at there'll And various being be that equipment, are to generation, opportunity starting to What's it's the see big we had innings, about. choppiness of issues. see good and is to deploy, that's first So drive three talk perhaps, equipment. up. some after to seeing other But certainly it's But of yet wave. still that second-generation right? to got well. some another not, if deploy. and the we third the but

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

Your line open. is

had follow-up center Hi, side. thank on just you. Victor, data the I a

to the sizes help it's versus rate. of that upside to see given the please big the Thank that. us $XXX versus storage hit couple others? A just you you. came business run $XXX million that it compute could I understand largely how good within the or understood And So now that relative what various components million business, want of compute came, side. I questions sure in make from are

the probably time the between there's and digestion. strength just right, would there’s memory look like that quarter, would that good the database. and I vary of then your But it certainly, and much video, still this big pretty strong last some know, interest strong I to any because terms say you continues networking say although SmartNIC, to in a followed to compute again, in wins given Yes. a on by it applications, perkiness adoptions going order, storage. again you areas know, lot way, compute in And seeing in led this, of in the And then in was refresh that’s would compute. we're very I some say, and of and we're

You of the could because low fintech SmartNIC in aspect. in latency

as a win general, we're of pipeline You other, separate SmartNIC, there. well. of momentum pull, could in pleased and I big I from good certainly, also see think think good referenced. really seeing went that in lot about as that general, development continued very But computing But that right? fintech, So we apart

always wins I way, is good as both and storage. say are right I to sort just like strong, which want higher. compute other that's seen in So is happening large what It's two. seeing our We've the I opportunity And not consistently nothing would from there storage network felt quarter-to-quarter, it don't we're really say that is the probably of we've that and varies well. by quite think as in as now. And

But networking Right. right? relative compute then at are sizes today, storage and the

I'm again? sorry, that say

my How The is big relative various was question. of sizes the segments, other that -- the

given run, any could the I as run, next. it move more, would think I networking biggest. long I still just largest. But very last the that what saying and is integrating what and a compute a compute between storage as now big probably quarter, I'd expect networking compute contributor then in the I'm occasionally guess in And the over said is And say, long I time and compute at quarter, in the but perhaps. was is

take storage. Some a through. flow we're a of And strong, to strength Networking seeing will lot be will that of and then very while there.

Got sense. Thank Makes you. it.

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

Your line is open.

good Hi, afternoon.

data center have a next Xilinx? for for think -- your as try follow-up, in you Just How visibility year for XXXX, that center your hyperscaler SmartNIC update revenue the should with fiscal data that to of guide win? opportunity more revenue you any quantify we could type now you

multiple would see in I well, say markets. we do that, Tristan, improving strength

course, of want pretty approach still to there's cautious terms you here the election. take much I uncertainty response, presidential because in of how Congress pandemic, have think certain a we still the the

I different FY XXXX. I a our it Certainly, in go have to say -- we'll defer all in of Day things now let So would happening put in way, any Analyst But that. number when guidance we XXXX, would this right do me of give I FY what still long market I my will next center hit the in we over confident the prepared growth terms said we're our growth solid growth. several and run, all be years. that double-digit will growing of the feel will markets data greatest in we And as remarks, this have though, through we like we December, think rate that serve I'd over despite sustained double-digit of

great. hosting you follow-up. important center that And that something is a Has holding in then traction like terms of FPGA means that's I future? of changed or use are there to year. whole anything you're to the how that other virus and build understand Okay, your just Is to on ecosystem? vision this data quick around plan for on developer in XDF It in building in not FPGAs looks of data wanted center? XDF community how the terms develop

the very say everybody, event or like altogether. for we in geography for people bring of X,XXX-plus certain literally would a I and Well, was together, big us X,XXX XDF, that would

in of people able we And various virtual right? different continue Then thinking same in because called the the a what about This together of to have a modify sequence be users events Adapt, is do wouldn't convey to same and pandemic, to essentially of we information, kind the new end, setting. bit, get that little looked we a virtually. do in obviously, doing we is actually the that. at things So, decided to

if So, having spreading that instead call a you big of events, of series of that one kind will, we over events event, Adapt. virtual we're bang

of is I say because just changing well. of so to partners, think deliver and and going in engage all. pandemic mechanism, customers, so the we're So, I forth, and of it course, changed we're the year wouldn't users, a up how view it That's that as little important with which bit. our we've forth to this particular

Great. Thanks again.

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

Your line is open.

wanted I quite base you bit September where taking December, you guiding has lower the business business. for business and about for that my lower. that June. this just nicely into was base Curtis O'Malley were million Hey but or Tom December portion you or we that that to and you're a guys, higher question. thanks obviously the was March it that in than should a should When into the grown from June to see $XX There is Poland in to June? triangulate Blayne look data off on out in resetting ex segment clearly December or But think more to growing enough you of the you're so that Polands a printed center

the growing we're seeing year, I'd I government at of that, extent, short I here. actions the is, again, we is I mean, are the I guess, you how that's we what still perturbations. when in fuse kinds still some are said, say, as as about, general, well little about fact think, natural, too, that -- that want some that we any the volatility that's think we but just rate that trade storage think is where the you started think in given really the engagements, bit in that's that's of memory. key about confident we seeing I have that out typically today. said talking segment early guidance, unusual is in double-digits, I on again, always we very just And see So, compute not looking to the the fact we've the But see watch that the not of also just run again, a how growing say thing to of lots is lots we for, engagements with about top how some that bursty of I overall think for year, even to quarter-to-quarter, we're why And -- is because growing Because, -- and environment and right? side, then quarter, discussion this and on I I the I the we're look important the to things year-to-year our SmartNIC thing. caused customer stage progress. this providing to on think some though generally see pipeline feel think, are in even that add

pretty good digits. pretty that double -- in consistently year-to-year we we're So we’re on laser-focused feel keeping progress, terms of growing and

could Great. you I you talk there's Can isolate that right maybe you follow-up. for that to the percentage the the me for quarter. talk calls, given to about you just increasing world about in indicated wanted you defense guided state prior the on And maybe due you what was aerospace for what is medical medical? in know increased percentage business, some a given a going of bit. probably of Clearly, if expect business. that, your now. pull-ins record what's on revenue And I and that some a business world? Can sneak

the We is this area the but And is had break This exactly going an for what environment of address Xilinx Brice. driver it's for capability We think deployed a we don't workloads. for with will capability about Victor's in a the long think that's edge, AI good And of our X-ray adaptable one in SoCs the an COVID have our term. we environment. that medical, accelerations of do the announcement and more out helping at we quarter product MPSoC business more seen forward bringing strategy be customers. example

end at for So for and us, market. those be you're of particular that types edge a that driver good the it's it's applications will right, driver a

doing And from the focused we applications number way, that talked which designed I we've of and also aside would medical that cloud, they're places, are are and of So medical equipment, cloud lot we're a on a into simulation seeing in by modeling acceleration. and the right? ISVs medical direct add about also

So that DCG business, if you also within we will. see the

Thanks. Great.

Securities. line Your Truist from next William of the from comes question Stein

is Your line open.

question. Hey. about Thanks for taking my center. data Two questions

can hit growth still company said that or the view you're the First, Sam to you Victor, that's about it attention like one growth seems think earlier, a from talked others. you pay realistic in better market. And XX% presented double-digit perhaps wondering long-term It one, in some last still XX the XX. XX% bogey Days. to what is that or I've quarters, to in number worse? at if of expectation? tried beating the Is I things Analyst this not And I'm that you this

for mean, I than, things. XXXX we was things think that challenging have other year think is would I that, variety a I a say what yes, don't of much Yes. changed

So And everybody revenue, We make years ago. to bring for the at progressing this no on that. of business, not a kind two ballpark but there to development, Analyst But there'll some impact long-haul confident, still about think quarter-to-quarter. growth, do of we what really and to. portion we're we're be XXXX. talk say, focused Day. again, of happens that strategy, overall, I'd of right? I Alveo that And which, in ecosystem We year-on-year. And feel as We're we'll on back FY right? again, that boards is want that good to want very we're again, our sure tracking our business still just we that pipeline, not the a But had revenue being

that new, we've done tuned system that new I think yes, big I not bars up so which different revenue in think think I stream, granularity say, And stay distributors more changes, terms Day Analyst have the integrators, that. and we -- but overall, and and to hear on now. you're entire of I -- an we're going for channel, would distribution stand to is And

it, can follow-up? highlighting There's a they're that's only there's If helpful. meaningful I'd You've companies that this DPU, That's one distinction, and spoken a this similar not at very the I'm or market? in different a a product? is if a good more think in Xilinx difference competitor for one, you. it's this other a if highlighted have is two say the SmartNIC, today sees -- more they have a Xilinx And I as although is and marketing products. bit that's the I call would more that wondering meaningful, business potentially past least product, play have about if

Yes.

how do right. think the their unique more optimize is which specialization a path, little a customization to center, and in people the I just Let that to needs, a customers just validation, saying right, demanding the get more they lot ability data me economics to of that can't the with more or for for the good say away are is have function more and bit flexibility first security of do that's fixed tune, with mainly are SmartNIC, a their whether they overall what of data and sort

if do I'd say a will, And is so have embedded that now really SoCs. fairly taking and adaptive to that. And you flexible that's a very most infrastructure products. isn't people using of array typical effective, have are good approach obviously, trend, ARM different which efficient and really We with still That the processor architecture we approaches. very, large cores, on particular our it, we way

we significant pretty more really, customized just you as mean, after changes So it, people things from path the feature what will. we most very in could actually homes portion features, exactly as new -- fixed do customize But data deliver provide mean, low being you are security acceleration the well to or on a proofing, of is, software of high-performance I that's I capabilities how I make afterwards, powerful latency, the terms So we how Plus, to allow they much in program to piece make the need. of sorry, and homes and typical. think, new again, to if able software silicon same

capability. I So that we have think strong

completed was Solarflare think is we software final I add that increased and I when would the knowledge our also thing significantly one acquisition. systems

really hardware, in only expertise. have So really adoptable system good experts and have terms not overall quality uniquely of we drivers powerful now production we this hardware, but also and do

us the competing the you served well that including in against players, I one mentioned. So all top think certainly that

Victor. Thanks

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

Your is open. line

a My the of and historically, the guys, of around and Thanks you for doing in the in solid XG, million question questions likely $XXX late even stages and are WWG, quarter a than quarter. guys more were I has deployment. side know the the And thought early were FPGA on we I side here, on bump we're then been also content but expecting early WWG.

aren't So whether they well. for back? getting also parts Do as guys had some I our like views we the any have competitor, you expectations a And Thanks. are you versus you seeing it's It why and a business in macro then into their guess, competitive Qualcomm. WWG? sounds ways threat more on perhaps

Yes.

address me number points of let So there. a

we on typically the there enable maybe quickly. -- people get So really to

think there, deploying Samsung go and we largely that, China, did And what we see first which happened Korea expected right? Frankly, ahead of I in I would there. everybody ahead I South we're geographies. in mean, all right? were I of think even with think

quite on. bands not we what In in such way. don't saying in grow continue in baseband, been fact, more so of massive where we where configurations But time, rapidly, traditionally because in again, the there getting we been more terms have of said, were We very we strong market many hand in in on strong. going the we we different and you fact, a totally to hold we a over and big have And with radio. some different to we're expect the displaced. to as traditionally that strong, candid got enabled exactly to were that then to And area radios, be it's MIMO

right? still of at I XG but that run headwind is other that is, is the early and back will we want in quite that believe stages. just this again, And I to of think are the the trade just I this point we customers kind our beat keep communications absolutely disappear thing, one say to things want thing doesn't getting don't rate, overnight. of I kind that a significant but to top guess So is it that, zero, So

XG around only significant exceed we considering one opportunity we're us, we're despite solution much especially that, think going potentially But in challenges more top still in of so and and that. And I that we to and that In in would losing big evident communications the what but say, because XG, ideal not whole very a wireless, O-RAN, XG, segment, really but that. we're about challenge. our complexity the fact, again, I in customers holding, see there's any for that's for talked wasn't the a that is

inflection, looking but So stay is I shape. quick still is -- tuned. and here, that a we're for the very It's think it's in long this still -- good journey know everybody I

I anything think you Yes, are the announcement on points. those Qualcomm to and... say have fair Do

XG done And your like on certainly position going look a on strong at it you showing yes. soon game, I'm during now, that announcements upped bear you'll to we're I Versal, market. folks competition we're because sorry, to integrating who and and capability I'm and we've -- in feel not just I why guess in that's about doesn't analog I me that keeps And to and a Look, other to are that be it pretend game in. things such technologies very that. look, we RFSoC, surprise is our more wanting with right? hear adjacencies with big because like more speed up it's broke just move to now again look, the opportunity, fully bringing

Victor. again, Thanks,

you. thank Yes,

comes from from question next Your ISI. line the of C.J. Muse Evercore

is open. line Your

C.J. on Kevin for Feeney This is

things of the what guess, Like the just of next is in I other seen you the and you couple seeing maybe first-gen kind of, ramping on you a a I just can of second-generation versus XG more design see coming curious was then guess, wireless, up? bit want equipment equipment? some you inflections C-Band are critical you've win about what or and that to about out talk in So And talk see activity I couple were years? over

Yes.

in stages. different people think of I again, and generation, terms are the second in

Some far people are pretty along. are still others feel early,

wave. we down just public, coming be pipe the the the announced publicly for about Samsung, in for going that and have second that at timing the perspective, from work we in more good terms family. one Versal very But of a time one there again, RFSoC not was of the the and to think that's first Again, right, feel doing we're Versal is we the the is think I that. really things

we've and successful, deployed. seen really been that that's So,

think I about significantly. we've talked of really a lot very have deployed the regions not how

to North sign. drive And starting so America do I their a is do good think the deployments fact that and is

being going that be felt systems consistently in deployed well. millimeter think we've but the sub-X, I be I action there. our of wave SoC in -- will as And most we think millimeter wave some to is is

being So, RFSoC. be again, we think because early in Versal but both seen And stay second-generation it's to we're deployed, of equipment for and systems, with those that. going lot yes, pretty I still tuned haven't a those

Your next Ramsay Matt line from of comes the question from Cowen.

line Your open. is

are on Thank it the afternoon. and where battling AIT potential inflections, all and to been primary data focused lot you and ABC businesses. here wanted have and a WWG out you makes center focus I wins much. actually very the guys that on call Good sense. on businesses Victor, the design there's for

time think great base primary digest silicon consistent your and another the probably your road businesses some road guys in to while. for have customer on maps work and done have some a those had and at hiccup I yourselves competitor, with map you

be I helpful. it if several or and what that that I not, just might environment Thank significant then for you're but years? one that noticed quick on holiday us that's wonder that's Intel, quarter, update broad-based in win a could mean a you. was seeing just Brice. quarter the if you guidance, sort the And Altera. a next So, And of probably XX-week the design versus would for

on. Yes, this points Thanks I the I'll and start question. will is then of add for Matt, Brice. Victor, couple think, a

week, $XX we do we relatively but be million for XXth forecast think have holiday small. XX the our on Those week. are days, that in will First, do it approximately

could gaining in of than and it. I also announcements really, talked various health example during mentioned systems some So, business markets help designs are win automotive, that's for but SoCs, that we new that going think automated market, faster FPGA about, announcements propel driving of say see the quarter for on XG design Examples where our radar. AI, the of the just had. size the in markets we really to in When sockets. thing adaptable x-ray two you the strategy care, were about had traditional the first the core MPSoCs we the the I you of about getting end think the is that I'd

Victor as play automotive, short the grow put those in end that the And defense, for. So, significant think as and in economy those going also we we end in tolerant look devices on we the the markets, see to And across we but device edge that that then aerospace the radiation quickly markets, larger the and award term mentioned get for and of there's company. got be recovers, and will drivers in broadcast are an autos. section

$XX market strong expect our optimized, our think recovery products AI We for And going and and then that when again, innovation we just we complexity. and help is which on for that's economy. over learning radar will big high a transistor we the with and time low about strong also specialize. device have that where that operations, think is forward. think a forward. talked is drive billion for tracking And emulation, the finally, have business edge then that that, market product And power utilization And talked we for machine We going focus about us, grows devices industrial, opportunities in our we the device and to have industrial. think and that performance, measurement we that's we we about test quarter

FPGA we'll for traditional good beyond all that that really across those the and we're confident drivers in years So will market. be growth businesses what's coming have normal the

that, is we're to I'll share angle to yes, Yes. competitive get The overall. about we'll only confident our and you continue thing them that add to to with relative continue that regard asked we

that fact in the effect. and by large, they is have to of some we some in we've could we said before have you most some they other other of kind think opportunity making own instances design like to the well, say, not and challenges Very do think Yes, wins. to executing compete, from competitors or think, said, down a that. really necessarily as our that may that certainly now, don't But I I'd the perspective. challenging often, list short fact so in product and will of, that when there, feel I we continue. it to addition get most -- attributed I'd we're fact, many that we're innovating vendor they're it's really the if In that

Thanks. guys. Really there appreciate the color

the question from of Needham line Company. & from next Michelle Your Waller comes

open. Your line is

Thanks the for question. guys. Quinn. Hi, taking on for I'm

So results. gaining of on based been just momentum for me. It recent benchmark some like one their one has seems Nvidia inferencing, in quick strong

Just December quarter. just us one fluctuating what opportunity we then, It wondering And your assume update the December wondering Brice, -- inferencing, a in quarter? is over beyond like beyond guys And for it's you? shaping few if rate and you tax quarters. on quick the that looks should progress can for and the past of the how just on actually kind been

comment tackle then Okay. I'll tax on will the the other. rate and first, Victor

on the for benefit in for QX, is if share-based that. And probably happens ultra-low rate, appreciated, non tax noticed X% So GAAP. what they've you had our yes, And in the QX tax an really tax awards we we get vest. rate, a

driving So the see look that's lower what's tax you the a more quarter. rate rate. we for When normal forward,

Singapore Michelle, then or more term, probably as X the X% probably X%. increase we'll is QX think about our rate from guide normal. we to longer goes So, X over time And when points

answers question. the So, hopefully, that

Yes. Thanks

of terms in then, inference. And Yes.

I ones devices. center, were that wins, computing, to First to, well and the mean does kinds right? So, everybody in all inference don't edge as of recent want of all, automotive really but sure just wins understand edge data referred kind make beyond well devices you as I those instance, applications just for an endpoint in other applications edge goes of

I I most doing processing. we the That's whole data AI in are accelerate not application that well, portions completely the we're application. dominated applications is So neuro we're of we've network acceleration, portion, broader of inference. right. why to said center, the able the think very kind always for Within think, by And coined other

shine the be actually where as We're of areas And accelerating to as parts continue we we're to yes, not where well we application driving focused I is including towards And really inference. AI. other so tend think the training. on

inference I competitor you in cloud, mentioned AI And at we're think but I fairly just that doing, don't plays all. new. accelerating that's the see what but that also not AI applications have think -- out. And thing. that can about necessarily accelerate that again, We'll only what they're the So do all that's these enable building is things one we to have range, think to only to we are we that really differentiate. of that has this will, it you be not dynamic and dedicated great hardware Again, to and people support, how if

helpful. That’s Thanks. Okay.

Srini question line Pajjuri Your comes next the SMBC. from from of

is line open. Your

couple Thank you. A Victor. Hi, guys. of questions,

guys been looks I lot First It NVIDIA, inflection market a on the it market. like you like in itself. are talking of DU the and there's et SmartNIC about and Marvell an cetera, looks has as for the from around what's $XXX I million you of potential I'm SmartNIC one just that to then inflection? think wins. mention while. curious And driving did design know about a

a could us do that is give And for And some see hitting you when run that you big idea million I how If rate? business $XXX that you? then follow-up. have

just means are that data upgrade think why have. somewhat momentum towards centers much more of the I I code driver so the to there's that. to bandwidth is be Look, really that Yes. is, Okay. economics reason to center think SmartNIC the the by the support is recognition having data one, clear But bottlenecked networking they causing

you get monetize, running codes offloading, for don't by don't that. those get that doing which So code, you paid right, by monetize

then And right. of people disrupted, to lots things data then is could indeed, really that computation, of I want picture you than off service right, cores many computing those the center the to terms do many think do multiple there this, think compose in areas, of scalable I motion, win in of level with itself. in play really of -- there’s the And it they people to all amount throughout CPU computer, people there's shift do architectures unique. and we NIC, that's resources smarter and beyond architecture all center be to actually part is this all really big phrase storage, people have a different though. that right, down, then SmartNIC could because of with need, dumb of that the a is that in to the that coin that Other you network But going then -- and there's need security. that a bigger in how that that people to entire want is than If just being And -- the devices rather of well, data right? architecture data the I is they and distributor that. types and one goes

whole, the we and revolution one ability to is are I part the exactly would customers need what we disruption to the just architecture. that -- is again, they've significant that people guess of flexibility, SmartNIC data unique with. I are and So those I center think things the enable deployed, in customize And say after value been what also change way our pretty that the

yet frame. but ramp. that that things fairly But yes, that it we that that haven't the be activity quick multiple good there's XXXX We've wins a $XXX seen talked run And to So that, of before time we've already the hitting in But SmartNIC. we see be in we million that from. and clear, terms think start is lot we we've revenue. rate converted somewhat the revenue obviously, in got in different to I pipeline in the just of FY customer. one business won, Obviously, a about, will referenced will

strategic Victor. more of question, Got then a it. And

to having for there particular, be case package of M&A at that same the the or in module. and Given the like, as looking to both It part least are the a made seeing, or all CPU certainly, together is we acquire ARM. looks accelerator NVIDIA

side. the the capability, been which years. in well And You done you've extremely investing acceleration guys have have also few on you been -- ARMSoC have last

you that question I more market, out don't the wouldn't I guys the interest there, make at be wouldn't sense to my want -- to you there seems ARM least why kind taken use expertise to the to word And make be market? large front, because just word server of house. off, the bit and for aggressive a targeting of sense? CPU seems finally does the for So that make a you is, be in opportunity it given to it I'm like things even TAM lot mean, in why but target on Or market, it have taken guys already sense curious,

this respectful would is group disciplined about and regarding the what method not answering rumors. So that very first I say any been commenting questions of has top us or

manufacturing, it about has way being to architecture, years CPU as mission FPGA how got other that any that asking I noise We I in were me this I'll around market, very M&A. you opposed focus the you SoCs ago, the modify extent, that, software. and point of to large we've now whole extent after since unique silicon think it a can technology this So, a of architecture capability and about scalable believe and to that invented that very you in more to as Xilinx a more had over out, adding multi-core through time, a And ARM there. number capability.

doing own designer. microprocessor capability. when real a My have do I background was engineering, back SoC So as I was we

that CPUs. So you strength, but like right, but our core class something understanding out to think we need that to not is core serves areas. to create we kinds including I us expertise, strength of going thinking with have from this that certainly server is make I stay a software hardware think core well perspective, capable, and strategy really in right? expertise But to do about it that the company sort the adaptability, those to with have feel how of to many to company, we're And we that of is happen, the this that stick flexibility, people the want other together are we strength really us architectures of very

really, lot combination capability of the sets of the with But computing. and think opposed have all that you're right? not we'll heterogeneous That view in world all hey, the And AI of multicore of I going to pretty have about as have that. all computing, engine, future, mean, of elements, our SoCs right, SoC, I we'll processor. a with those spatial together tiled think we many the the a take it's people exercise consider adaptable together now and the say, skill high-performance companies on, which what kind the is much heterogeneous I computing. focus we historically on been CPUs to that's engines

So...

it. Got Thanks the for time.

question Raymond Chris comes of final from the Caso your from line And James.

line is Your open.

Yes, go to Xilinx you that the on expect And to Xilinx proposition architecture? value solutions? O-RAN. on comments Where what's content thank where you. on -- is in upon play about you that? could specifically, Question would you expand there And I for the where against And guys you content if on to guess win some of go O-RAN the expect architecture? competing

that on IP we've story with and we're -- in only on with the with other of we're have we of functions, say. but to one customers terms our done the end think silicon things to component the we with of other again, how unique own gotten Well, sense consistent I've primarily front radio that terms lot really and as of RFSoC you state a it's think, of and more stronger worked then IP there's I side we own things but think formula, our we've said, or transforming a being about just I talked in system our digital we've is what of a some in the opposed architecture, our a future as it what doing device RFSoC can of not platform is company and And company.

Now, we're partnering, for O-RAN, still too.

not that I'm with around perspective, have professing And as worked we've we're elements. So, software state as AltioStar with we to both and all players Naviner well as a from the well. other partnering

more have solution, again, different not important to permeates different we've think all the we situation, custom to to going carriers of things these about not deployed, things. about unique be And in and a these that for this think that's in just have flexibility be deployments and right? silicon are very different different silicon, of the that of customize our have So, to one that a ways to unique O-RAN, those do platform that things O-RAN to lot but long is of the when think to all I in be then hear all I you'll have because I particular, going O-RAN is of interoperate a -- a in it And that. for it lot just hardware, configurations. those able you come all with is understanding talked base products right, system And terms has that and could deployments

suited of think I why we'll partner that's we others with and as some O-RAN, both we really So, for have well. we're the well think and knowledge

Thanks.

remarks. Victor have I for And to questions. closing call some allotted different the over Mr. the back we you turn Peng, reached

Thank you.

So, the I'm my adoption had near-term, while ISE wins the very restrictions. to to execution, over and seeing well extremely growth long look, and we've making and revenue sustain customary most still double-digit lumpy, QX We're And solid we're great confident center I strategy you've our COVID-XX team's able delivering very is want broader grow about closing, just in proud being in data excellent of and confident as on say results challenges the lot we're software and very data recent these to continue we despite of progress good run. center on engagements even in we're trade a that Alveo, our heard, the -- discussion as ecosystem. of quarter-to-quarter, our

growth. then of the Versal to business world Again, general, begins We and geographies. different the volume production course, to once expect more as WWG and XG, deployed RFSoC deployment, resume ramp continues as becomes also around all in broadly in

in is very While days, for O-RAN in is big opportunity us its the believe gaining early we a it's this future. momentum, and still

several in than is business, more core impacted sign others. strength automotive the which our business bit encouraging little Lastly, in was recovery a very markets, including showing for

most the on robust very also degree focused enabling for and power again, customers extremely market we're very future deliver needs software and our to optimal of We're complete So, a in our a way, development enhancing our solutions meet to their customized capabilities also ecosystem transformation, costs, platform to environment. our performance, deploying growing time fast balancing proofing. and

we the and challenges, has presented confident growth run. So strategy sustained been while in our solid several XXXX over remain -- long

us call. Matt afternoon housekeeping for on it And you turn I'll a thank for this back the So few comments. to joining

us today. thanks, XX:XX Victor, PM X:XX this and Great. of everyone, have at today. beginning call for Thanks, a We'll joining Pacific, playback PM Eastern later

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

third next and participation. for your XXth the you of January, release will for very thank completes date earnings Wednesday, year after of This call, on be much the XXXX fiscal market quarter closed. Our our

Ladies for participating. and conference does call. you conclude gentlemen, this Thank today's

disconnect. now may You