5G Drives Xilinx's Double-Digit Growth

MarketsMotley Fool

Semiconductor provider Xilinx (NASDAQ: XLNX) reported fiscal fourth-quarter results after the market closed on April 24. Revenue surged by nearly 30%, as 5G drove demand for the company's communications products. Xilinx sees 5G as a huge opportunity, much bigger than 4G.

Here's what investors need to know about Xilinx's fourth-quarter results and its guidance for the first quarter of fiscal 2020.

Continue Reading Below

Xilinx results: The raw numbers

What happened with Xilinx this quarter?

  • Core product revenue declined by 4% year over year, accounting for 32% of total revenue. Advanced product revenue grew by 55% year over year, accounting for 68% of total revenue.
  • Broken down by end markets, communications revenue jumped 74% year over year, accounting for 41% of total revenue; data center and test, measurement, and emulation revenue was down 7% year over year, accounting for 18% of total revenue; automotive, broadcast, and consumer revenue was up 20% year over year, accounting for 14% of total revenue; industrial, aerospace, and defense revenue was up 1% year over year, accounting for 27% of total revenue.
  • The Asia Pacific region was Xilinx's largest and fastest-growing geography, with revenue growing by 56% year over year, accounting for 47% of total revenue.
  • North America revenue was up 13% year over year, accounting for 27% of total revenue.
  • Europe revenue was up 12% year over year, accounting for 18% of total revenue.
  • Japan revenue was up 20% year over year, accounting for 8% of total revenue.
  • Alongside the earnings report, Xilinx announced that it had reached an agreement to acquire Solarflare Communications, a privately held provider of high-performance, low-latency networking solutions.

What management had to say

During the earnings call, Xilinx CEO Victor Peng discussed the 5G opportunity:

Peng also talked about the company's acquisition of Solarflare:

Looking ahead

Xilinx provided the following guidance for the first quarter of fiscal 2020:

  • Revenue between $835 million and $865 million, up 24.3% year over year at the midpoint.
  • Gross margin of approximately 66%, both GAAP and non-GAAP.
  • Operating expenses of approximately $315 million on a GAAP basis and $308 million on a non-GAAP basis.
  • Other income of approximately $15 million.
  • A tax rate between 7% and 9%.
  • Using the midpoint of Xilinx's guidance ranges, non-GAAP earnings per share are expected to be approximately $0.96.

Xilinx sees 5G as being "factors larger than 4G over its entirety," according to Peng. Communications is the company's largest segment, so Xilinx is well-positioned to benefit in the long run.

10 stocks we like better than XilinxWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has quadrupled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Xilinx wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

*Stock Advisor returns as of March 1, 2019

Timothy Green has no position in any of the stocks mentioned. The Motley Fool recommends Xilinx. The Motley Fool has a disclosure policy.