Executives: Rick Muscha - Senior Director, Investor Relations, Xilinx, Inc. Jon A. Olson - Chief Financial Officer & Executive Vice President Moshe N. Gavrielov - President, Chief Executive Officer & Director Lorenzo Flores - Vice President-Finance &

Controller
Analysts: Romit J. Shah - Nomura Securities International, Inc.

William Stein - SunTrust Robinson Humphrey, Inc. Ambrish Srivastava - BMO Capital Markets (United States) Ian L. Ing - MKM Partners LLC Hans C. Mosesmann - Raymond James & Associates, Inc. Tristan Gerra - Robert W.

Baird & Co., Inc. (Broker) John William Pitzer - Credit Suisse Securities (USA) LLC (Broker) Christopher Hemmelgarn - Barclays Capital, Inc.

Operator: Good day. My name is Skinner and I'll be your conference operator. I'd like to welcome everyone to the Xilinx Fourth Quarter Fiscal Year 2016 Earnings Release Conference Call.

I would now like to turn the call over to Rick Muscha. Thank you. Mr. Muscha, you may begin your conference. Rick Muscha - Senior Director, Investor Relations, Xilinx, Inc.: Thank you, and good afternoon.

With me are Moshe Gavrielov, Chief Executive Officer; Jon Olson, Chief Financial Officer; and Lorenzo Flores, Vice President of Finance and Corporate Controller. As we announced in February, Jon will be retiring in May with Lorenzo succeeding him as CFO. Jon will continue to support the transition through July. Jon and Moshe will provide a financial and business review of the March quarter and fiscal 2016. Moshe will add a high level perspective on fiscal 2017, and Lorenzo will follow with June quarter and FY 2017 guidance.

We look forward to providing you with more details at our upcoming analyst day on May 23. 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.

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 Jon. Jon A. Olson - Chief Financial Officer & Executive

Vice President: Thank you, Rick.

Fiscal year 2016 was another profitable year for Xilinx although revenue did not meet our expectations going into the year. Revenue was $2.2 billion for the year, down 7% from last year but strengthening throughout FY 2016. Gross margin remained strong through the year, averaging 69.7% as our pricing and cost management efforts continued to have a positive impact. Operating margin exceeded 30% based on these margin management efforts and prudent spending. Cash flow margin was 33%, the same as last year.

So our lower revenues contributed to a lower operating cash flow of $730 million. We repurchased 9.7 million shares for $443 million and paid $319 million in dividends, a total return of $761 million. This is the second straight year we have returned over 100% of cash flow and 11th straight year of dividend increase. Turning now to a discussion of the fourth quarter. Xilinx sales were $571 million, up 1% as new products continued to grow and we saw stabilizing trends across our end market segments.

Communications was flat with a small growth in wireless offsetting a small decline in wired. Industrial and A&D was down slightly with strength in aerospace and defense offsetting declines in industrial, and test and measurement. Broadcast, consumer and automotive grew 6% powered by another record quarter in automotive, demonstrating our strength in ADAS. Gross margin in Q4 was 69.2%, higher than last quarter and higher than expected due to the mix of customers and products in addition to lower product ramp expenses. We continued to aggressively manage both the pricing and cost sides of gross margin.

Operating expense at $217 million was slightly lower than our guidance. A reminder here that a significant part of the decline from Q3 was due to the 14th week in our Q3. The increase in revenue, gross margin, and lower operating expense drove an increase of more than 10% in operating income for the quarter, up to $178 million. Other income and expense was an expense of $8 million, higher than forecasted due to an equity investment write-off. The tax rate was 14.6% for the quarter.

Our net income for Q4 was $146 million or $0.54 per share. Operating cash flow was $127 million, down from last quarter, primarily due to an increase in accounts receivable. Diluted shares were 268 million shares including 10.5 million shares from the convertible. During the quarter, we repurchased 3 million shares for $143 million and we paid $80 million in dividends. Now turning to the balance sheet.

We ended the year with $3.6 billion in gross cash and $2 billion in net cash after our debt. As mentioned above, we saw an increase in accounts receivable to $307 million. This was entirely due to the timing of customer shipments in the quarter, and we see no credit or collectability issues. Inventory was $179 million, down from $17 million from the prior quarter and down $52 million from the beginning of the year as we continue to manage inventory down. Let me now turn the call over to Moshe.

Moshe N. Gavrielov - President, Chief Executive Officer & Director: Thank you, Jon. I am very pleased with both the financial and operating results of the fourth quarter. Our revenue has rebounded to its highest level in over a year, while expanding the growth momentum which started in the fiscal third quarter. As Jon discussed, both profitability and cash flow remained robust throughout the entire year, reflecting our strong business model.

Our execution on the 28, 20, and 16-nanometer nodes has been exceptional. The realignment driven in our sales organization is leading to stronger customer relationships and expanding our reach. We are confident this will translate into revenue growth from both market share gains and market expansion. Following are some achievements, which illustrate the strength of our position. Our technology and product leadership has translated to 4 points of PLD market share gains over the past five years.

In the fourth quarter of fiscal year 2016, we delivered record sales on the 28-nanometer node and expect to set a significant new record in the June quarter. Our 20-nanometer family approached $100 million in revenue in fiscal year 2016, while significantly exceeding our targets in all four quarters of fiscal year 2016. We expect to ship well over $30 million of 20-nanometer product in the June quarter. In a successful demonstration of our market expansion efforts, revenue from our Zynq product line more than doubled in fiscal year 2016. Zynq is particularly strong in the automotive, wireless and industrial markets.

For example, our automotive business has grown over 60% over the past two years driven by deployment of advanced driver assistance applications in over 60 automobile models. At the 16-nanometer node, we have delivered all three UltraScale+ product families ahead of schedule and have already shipped six unique products to several tens of customers. Our one year plus leadership in 16-nanometer products has generated multi $100 million design wins on customer platforms, which in the past have traditionally been ASSP based. We have established data center partnerships targeting data center acceleration initiatives with both IBM and Qualcomm and are deeply engaged with multiple hyperscale data center customers. Lastly, we completed the rollout of the SDx family of software-defined development environments.

This is a key capability to significantly expanding our user base beyond traditional PLD designers to a much larger community of systems and software engineers. We finished fiscal year 2016 with undisputed product leadership on the silicon, software and IP fronts, very well positioned in multiple markets coupled with much deeper engagements with key customers and partners. Our excellent execution could not have come at a more opportune time. The consolidation in the semiconductor industry is leading to rationalization and elimination of competing product lines at both traditional ASIC and ASSP companies. This phenomenon has opened up new growth opportunities for Xilinx as the vendor of choice with our existing and new customers.

This is a carpe diem opportunity. The time is ripe for us to capitalize on the three successive generations of leadership to expand our market position. We intend to do this by simultaneously pursuing on the following four fronts. On the 16-nanometer UltraScale+ front, due to its excellent software and pristine silicon functionality, we have elected to both accelerate our currently planned 16-nanometer tape-outs and expand the original product portfolio. These multimarket 16-nanometer products complement our successful 20-nanometer family with its estimated 80% market share.

They address near-term revenue growth opportunities in the data center market tailored for the first wave of 5G deployments in the 2018 timeframe, while positioning us for longer-term massive 5G deployment. After that, serve the automotive market and form the basis for expanding our platform wins in the Industrial Internet of Things. Similarly, we are executing on our plans to deliver our 7-nanometer product offerings. This capitalizes on our extremely tight relationship with our absolutely outstanding foundry partner TSMC to satisfy the advanced technology needs of our leading-edge customers. This is another pillar of our SAM expansion strategy.

In parallel, we are committed to providing our customers with an attractive high volume spot in 7-nanometer family. This family will be implemented in 20-nanometers and will expand our market position in the price-sensitive parts of the market. On the software front, we will enable market expansion by a breakout in integration and programming models targeted to high growth segments driven by cloud computing, vision processing, including, but not limited to ADAS, the Industrial Internet of Things and 5G. Our plans for fiscal year 2017 while aggressive are based on the financial principles we have consistently demonstrated. We're committed to continuing to invest prudently to preserve and extend our market position, while delivering longer term a 30%-plus operating margin and preserving our commitment to return cash to our shareholders.

Before I turn the call over to Lorenzo who will discuss the financial guidance of Q1 and the rest of fiscal year 2017, I would like to use this opportunity to personally thank Jon for his 11 years of extremely significant contributions and exemplary partnering at the helm of Xilinx. Lorenzo, you have big shoes to fill. Lorenzo Flores - Vice President-Finance & Controller: Thank you, Moshe, and I also would like to thank Jon specifically for the leadership function over the past 11 years. Moshe has established the compelling opportunity for Xilinx, and now I want to provide you all with the financial guidance aligned to our taking advantage of that opportunity. Starting with Q1, revenue will be approximately flat.

We entered the quarter with backlog down slightly and are expecting turns to be about 49%. We expect new products to continue to grow with 28-nanometer growing to a new record, and 20-nanometer exceeding $30 million. With respect to end markets, communications and data center growth will offset a decline in industrial and A&D. Communications and data center growth reflects a continued ramp of our customers' wired designs and a near-term firming in wireless. The decline in industrial and A&D is primarily due to program timing in A&D.

Broadcast, automotive, and consumer will be down slightly reflecting a small inventory cycle in automotive and a small decline in broadcast. Our gross margin will be between 69% and 70%, and our operating expense will be approximately $220 million including $1 million of amortization. Other income and expense will be an expense of $5 million and our tax rate is expected to be 14%. Share count is expected to be 266 million. As we move into the discussion of our full year guidance, I want to remind the audience that we have our analyst day on the May 23 in Boston.

While I expect there will be questions on the full year guidance, we will give further details at our analyst day. First on revenue, we see annual revenue growth to be in the range of 4% to 8%. This will be driven by growth in communications and data center and broadcast, consumer and automotive and to a lesser degree by industrial and A&D. Within communications and data center, all end markets will show growth including wireless, as it has recovered from the low points in FY 2016. In broadcast, consumer, and automotive, we expect automotive to continue to grow strongly, although at a reduced rate with the other end markets showing some growth.

In industrial and A&D, the overall growth of the segment will be mitigated by program timing factors in A&D, although the underlying business in A&D remains healthy. We see the growth of our overall business weighted into the second half of the fiscal year. For gross margin, we expect to remain in the range of 68% to 70%. Our price and cost management efforts will continue to support our gross margin, though we expect some pressure from product ramp expenses and customer mix through the year. For the past few years, we have been deliberately increasing our relative emphasis on R&D, while extracting efficiency from SG&A.

This has provided the resourcing for the execution we have seen on 28-nanometer, 20-nanometer and now 16-nanometer, and has put us in the advantageous position Moshe has described. We are continuing that approach with an investment level and focus consistent with addressing the opportunity we see in front of us. In order to capitalize on and extend our market position, operating expense is expected to grow 7% to 9% with almost all of the growth being in research and development. This growth funds the expansion of our leadership position with the 28-nanometer Spartan-7, significant increases in tape-out expenses to accelerate our lead in 16-nanometer, and our leading 7-nanometer product development. Other income and expense will decline slightly through the year from the $5 million quarter level in the first quarter.

This will mean that we will see approximately half the expense we saw in fiscal year 2016, a significant improvement driven by last year's interest rate increases and a small anticipated increase in interest rates in FY 2017. Our tax rate is expected to be approximately 14%. With the growth in revenue and the operating assumptions I've described, we anticipate low single digit growth in earnings per share in fiscal year 2017. Let me now open up the call for questions.

Operator: The floor is now open for questions.

Our first question comes from Romit Shah from Nomura. Romit J. Shah - Nomura Securities International, Inc.: Oh, hi. Thank you. It's the first time I'm hearing about some softness in automotive.

I think you guys made the comment for fiscal 2017 that it would grow, but perhaps a little bit more slowly. So could you give us some more color on what's happening with your automotive business?
Lorenzo Flores - Vice President-Finance & Controller: Sure. I'm not exactly sure I relate to the softness characterization. I think what we're reflecting is the rate of growth in the past couple of years has been very significant, although the rate of growth in FY 2017 will also be significant, it just won't be at that same rate. Romit J.

Shah - Nomura Securities International, Inc.: You mentioned in your prepared remarks that there was some inventories in automotive, I wasn't sure specifically where that might be. Jon A. Olson - Chief Financial Officer & Executive

Vice President: Hey, Romit. This is Jon. I'm not exactly sure where you heard that.

What we're trying to characterize is that the automotive segment for us is growing quite significantly and has been and is going to continue. We are experiencing in the industrial side a period of slower growth than we had anticipated, just because of some macroeconomic areas, but definitely no inventory issues with respect to automotive. Romit J. Shah - Nomura Securities International, Inc.: Okay. Maybe I just misunderstood, Jon.

And the other question I had was on 7-nanometer, can you give us a sense on when you think you'll be ramping 7-nanometer and in particular, what does that sort of mean for your opportunity in data centers?
Moshe N. Gavrielov - President, Chief Executive Officer & Director: Let me take a cut at that. So, data center is a fast-emerging market, and it's still in the nascent period, so it's a market which we expect over the next five years to grow at a rapid rate. For us, it could be significant and in that sort of timeframe as we execute, we believe that it could be a multi $100 million market, which for us is a big number. We can service it and we are servicing it already with our existing product portfolio, so we actually have design wins in 20-nanometer, 16-nanometer, and I'm pretty sure we would expect to have significant design wins in 7-nanometer too.

What you will get from 7-nanometer is typically higher level integration, higher performance, lower power, all of these things are important to this market where every two years to three years, there's a total refresh of the data centers due to the rapid rate of evolvement. So data center is a big driver of our 7-nanometer business, but actually part of the expansion of our 16-nanometer we expect to have significant benefits, that's targeted at data center too. So, you don't need to wait until 7-nanometer in order to see our revenue growth in data center, it should come ahead of that. Given the nature of our business, after we tape out the device, it typically takes a year to move into production, and then the deployment is very market-specific. So, there are markets that deploy very quickly.

Emulation is an example of the one which deploys fastest, but data center is also a fast time to market for us, so probably 7-nanometer, our data center product, should be generating revenue, 2019-2020, that sort of timeframe. All right, hopefully that answers your question. Romit J. Shah - Nomura Securities International, Inc.: It does. Thanks, Moshe.

Moshe N. Gavrielov - President, Chief Executive Officer & Director: Thank you.

Operator: Our next question comes from William Stein from SunTrust. William Stein - SunTrust Robinson Humphrey, Inc.: Great. Thanks for taking my question.

I'm hoping you might be able to help us understand what looks like a bit of a lower than expected outlook in the industrial, aero and defense. It sounds like it's more aerospace and defense linked both for the June quarter and the full year. And I guess I'm a little perplexed because my expectation was that that end market was improving this year owing to DoD budgets and the like. Maybe it's more commercial aerospace that you're exposed to. Any clarification there could really help, in particular both for the quarter and for the full year.

Jon A. Olson - Chief Financial Officer & Executive

Vice President: Yeah, This is Jon. Let me take that one. So I think, Will, you're familiar with the fact that we characterized we had a roll-off of a very large program and we bottomed out, I think, in our June quarter of this past year for aerospace and defense. And we have had incremental improvement in each quarter from that point.

Actually, bottomed out in September, excuse me, in the September quarter, not the June quarter. We've had incremental improvement in every quarter and we do expect that incremental improvement to continue in aerospace and defense. It's just that when you look at the full year, we still ship quite a bit of product in our first quarter of last year that is dragging the year-on-year comparison down, so it's a modest growth in aerospace and defense. Moshe N. Gavrielov - President, Chief Executive Officer & Director: Right.

Jon A. Olson - Chief Financial Officer & Executive

Vice President: It is actually a very stable, strong comeback for us, and when the redesign of the F35 capability starts kicking in more towards the end of the next fiscal year, I think you're going to see some acceleration there. Industrial has been more bit of a timing issue for us with certain customers, A, and then some recent softness particularly in the APAC that we're seeing softness in industrial and in a couple of our regions, and that's going to grow a little more slowly than we thought, but we still are expecting pretty significant growth on a year-on-year basis. William Stein - SunTrust Robinson Humphrey, Inc.: That's helpful. Moshe N.

Gavrielov - President, Chief Executive Officer & Director: Yeah, I'm sorry. Jon A. Olson - Chief Financial Officer & Executive

Vice President: Was going to add something. Lorenzo Flores - Vice President-Finance & Controller: Yeah, I was just, you know, the FY 2017 A&D business is, I would characterize as there's a very broad base of projects underneath it extending from electronic warfare to munitions to data analysis and communication systems. And it's different from when we had the very large GSF program as Jon described.

So, I think I would characterize it as a very strong and diverse market in A&D. But it is coming off of the cycle that Jon described. William Stein - SunTrust Robinson Humphrey, Inc.: That's helpful. Maybe if I can ask for a brief update on the broadcast end market. I know it's relatively small, but it's one of these sub-industries in your end-market categorization that tends to move around a lot.

I'm wondering what the trends are there. Lorenzo Flores - Vice President-Finance & Controller: Well, there's two parts to that, the way I think about it. One is the cameras and then the other part is a distribution aspect of things. And the distribution aspect is moving more towards server and common platforms, and in some cases we're actually seeing some of that start to bleed into what we would call our classic communications business as IP protocols are used more. Camera business has tended to be more around trends of the technology, so thinking of the move to 4K and then 8K beyond that.

So we are seeing relative strength in the whole camera side of it, because of those trends more towards 4K in terms of recording content and things like that. The other side of the distribution we're seeing relative softness. William Stein - SunTrust Robinson Humphrey, Inc.: Great. Thanks.

Operator: And our next question comes from Ambrish Srivastava.

Ambrish Srivastava - BMO Capital Markets (United States): Hi. Thank you. I had a question on the OpEx. You guys have done a very good job the last couple years being very disciplined on the OpEx side. What are you seeing that OpEx is going up so much this year? And then I had a longer-term architectural question for you, Moshe, if you could please address that.

There's a lot of conversation around accelerating compute in the data center. And so if you could please provide us your perspective on where do FPGAs sit. If we look at the different kinds of workloads and what's the trade off in power versus performance, and specifically, does the fact that Intel is able to put FPGA and a server chip on a single, either on a package or a single die. Does that create moats or disadvantages for your solution? I noticed you had another announcement at the POWER Summit. Thank you.

Moshe N. Gavrielov - President, Chief Executive Officer & Director: Okay. Okay, Ambrish. So thanks for the first question, I wanted to make sure that I clarify. What we believe is we now have almost a once in a lifetime opportunity, and this is driven by two things.

One is outstanding execution and I'm not going to keep beating that dead horse. I think I can assume that the issue of credibility on that topic is no longer in question. I hope so. Ambrish Srivastava - BMO Capital Markets (United States): No, it's not. Moshe N.

Gavrielov - President, Chief Executive Officer & Director: Okay. Thank you. Ambrish Srivastava - BMO Capital Markets (United States): Not for me at least, Moshe. Moshe N. Gavrielov - President, Chief Executive Officer & Director: Okay.

It has been in the past, and I think now with three generations of leadership, allow me to feel vindicated on that topic. So when you've delivered on that and you see the massive changes which are happening in the market, and no way am I minimizing the challenges of competing with very large corporations like Intel, like the new Broadcom, et cetera. But in reality what is happening is, the semiconductor market has matured, is changing radically, and it's changing in a way where a lot of applications which in the past could justify an ASIC or there would be a small and medium-sized ASSP company that would provide a complete solution. Neither the ASICs are particularly viable and most of those little companies and medium size companies have gone. They've disappeared and some have merged, some just are no longer viable.

But in reality, a lot of those product lines do not have a path going forward. And this is a multimarket trend, right? So I wouldn't say that it's true in every single market, but it's true in a lot of the markets that we service that we actually now are finding that we have the – it's a much larger TAM we can address through our product offering, because our product offerings have evolved and with the Zynq product line and the like and the integrated capabilities, we can provide an alternative to ASSPs. And so both through our technology, through our market leadership and through the fact that the consolidation largely is eliminating solutions for a lot of these markets, which might not be multi-billion dollar markets, but they're nice markets for us, we are the best game in town, and the customers are telling us that. So I'm sitting in front of this great opportunity saying, okay, we have the technology leadership, and these opportunities are coming up. Do I take my foot off the gas? Do I keep my foot on the gas but where it was? Or do I push the pedal all the way down to the metal? And this was a strategic discussion we had, and we figured out that we can still remain at 30% plus operating margin and grow to that point in and around and over time grow a bit there, and we'll talk a little more about that in May.

But we're at the high end of profitability, so we might as well exploit this. And in a nutshell, this is an opportunity, and we think it would be foolhardy not to pursue it. And as I said, we can do this while retaining a fabulous return of cash to investors with almost best-in-class operating margin, we can still do all of that. So, yes, that's the message we try to deliver and we will provide a little more clarity on that, and that's why you're seeing the investment grow, and it's almost all in R&D because we have to do more tape-outs and we have to develop a few more things in parallel. So one way of doing it, of encapsulating this, and this could be viewed as being arrogant, we're doing it because we can.

The other way of looking at it is we're doing it because we can't afford not to exploit this great opportunity, right? And that's the thinking behind this. So, hopefully, again that clarifies the strategic question. On the architectural issue and data centers, so again, this is an evolving market, which is nascent at this point in time, and it's a market which traditionally has been serviced by CPUs. And over the past several years, NVIDIA in particular has identified that there are segments that are well serviced by GPUs and they actually have established a strong foothold in the market. What has become very clear and there's a lot of papers from third parties, there's one from Microsoft which analyze what happens with these massively parallel applications and how well they do if instead of just using a CPU or a GPU, you actually use an FPGA or programmable logic.

And what they found is that for a lot of very critical applications, there's anywhere between potentially a 10x to 35x improvement in performance per watt if you use programmable logic. And that's the essence. That market is evolving. It's a market which is unique because most of it, at this point in time, is controlled by very large independent companies that actually control the ecosystem for this. So it doesn't require a Microsoft with all of the x86 applications.

It can be thought of as an embedded application, which is controlled by these very large companies. And these very large companies are looking for alternatives to Intel and alternatives to GPUs, and this was cited by Intel justifiably as one of the reasons that they acquired Altera and paid what they did for Altera. It was worth that much for them. Going forward, we expect the market to bifurcate into an Intel x86 camp and everyone else, with everyone else regardless of their x86 or power-based or ARM-based, and for most of these other players this is a significant growth market, then we are realistically the only game in town. Hence, we believe that that's very profitable for us.

On the Intel x86 side, we do believe that Intel will do all sorts of integration things. Regardless of that, as we talk to these hyperscale customers, they're indicating to us that for a lot of their requirements, actually a non-integrated solution which they totally control is more attractive than one which is dictated to them from above. And so we're investing heavily. We think we have a big lead on the technology side, and we do expect this to be a multi-hundred-million-dollar opportunity, but again this is in a five-year timeframe. We have design wins, we have several of them.

They are going to go into production soon, and this is both likely in North America and outside North America. But it's still early days. And again, being a multimarket company, we believe that this will be a significant growth opportunity for us. So I apologize for the verbose answer, but there's a lot to cover on both... Ambrish Srivastava - BMO Capital Markets (United States): No, I appreciate it, Moshe.

Thank you very much. Good luck. Moshe N. Gavrielov - President, Chief Executive Officer & Director: Yes. Thank you.

Operator: Our next question comes from Ian Ing from MKM Partners. Ian L. Ing - MKM

Partners LLC: Yes. Thank you. More questions on these investment levels for the fiscal year.

I know you talked about it being a once-in-a-lifetime opportunity and customers are saying you're the best game in town. But how many years are you willing to grow investments faster than revenue? Do we have to wait until 16-nanometer materializes to get the benefits, or should 20-nanometer help reverse the trend at some point? I mean, is 30% op margin the line in the sand here? Thanks. Moshe N. Gavrielov - President, Chief Executive Officer & Director: Okay. That's a great question and I think we will answer it in more detail in May.

But just to sort of give you a preview, we're going to be approaching that either way, and we intend to grow the company over time to beat that number and to grow beyond it. So we'll give a little more clarity as to when you can expect that in May, but you're not going to need to wait several years for that. Now this year is particularly significant in terms of growth, because to be totally open, we have so overachieved on the functionality of the 16-nanometer that we are just accelerating the tape-outs, and each of these tape-outs is a multimillion dollar cost to us. So knowing realistically, we're sort of pulling several of them in, which is good news because that means that over time it should translate to revenue quickly. But what you're seeing now, this rate of growth in R&D, which potentially could be larger than the top line, we do not expect that to continue in the future.

And again, in May we'll give you more. Lorenzo Flores - Vice President-Finance & Controller: Yes, Ian, it's Lorenzo here. I think we are really, really conscious of the strength of our operating model, and I want to point out again what was said earlier, we've been very disciplined at how we've spent and invested our money in the past. I think this is a strategic investment area, and as Moshe said, our objective is to get back to our target operating margin levels as quickly as possible. Ian L.

Ing - MKM

Partners LLC: Thanks. And, Jon, congrats on your retirement. Hopefully you attend a lot of Green Bay Packer games this season. Jon A. Olson - Chief Financial Officer & Executive

Vice President: Thank you, Ian.

Moshe N. Gavrielov - President, Chief Executive Officer & Director: Not more than 16.

Operator: Our next question comes from Ross Seymore from Deutsche Bank.

Unknown Speaker: Hi. This is Ji (39:26) for Ross Seymore.

Thank you for letting me ask a question. So, Moshe, what gives the company confidence in spending so much more in OpEx that the OpEx spend will yield revenues given the past few years where revenue growth has been difficult to generate?
Moshe N. Gavrielov - President, Chief Executive Officer & Director: Okay. That's a great question. What sort of has happened over the past few years is we're in a business where most of the markets we serve take a long time to come to fruition.

And so if you look at 28 nanometer, which we taped out six years ago, it is now approaching $200 million a quarter. It hasn't quite reached that level. $200 million a quarter is, give or take, only a third, in and around it's about 30% of our overall revenue. So what you're seeing is the time it takes for the new nodes starting from 28 nanometers and now at 20 nanometers, which as we said we shipped close to a 100 million relatively quickly for us during the past fiscal year. They're in their continued growth phase, and also the Zynq product line is now in its more accelerated growth phase.

For example, automotive is driven by the Zynq product line, which is an expansion play. And so we're at the point in time where all of the headwinds we had, which are all technologies, some execution challenges we have had in the past which we are paying the price for, et cetera, they're tailing off. And the new technologies where we have much higher market share and where the expansion plays are starting to pick up, and so I think your question is very fair and a very good one, but the reason is that we now see that the headwinds are tailing off and, hence, the growth from the new products will happen. And we're also seeing the changes in the industry. For example, I'll just throw one thing at you.

Five years ago we predicted that the Japanese ASICs vendors would depart the stage, right. And at the time, that was considered a heresy, right, because they had owned the market for the longest period of time. And to a large extent they're gone, right. So that's an opportunity for us. A lot of the other ASIC vendors have gone.

I mean it's not that there are no ASIC companies, but there are fewer and fewer of them. The same thing is true on the ASSP side. So the serviceable market is now growing, and in order to exploit that, we're making these larger investments.

Unknown Speaker: Okay. And then as a follow up, is the OpEx expected to be back-half weighted in the fiscal year similar to revenues, so it can be moderated if revenues don't follow?
Lorenzo Flores - Vice President-Finance & Controller: The second half operating expense will be significantly higher than the first half.

But you'll start seeing the increase in the second quarter.

Unknown Speaker: Okay, thanks. And we echo congratulations to Jon. Moshe N. Gavrielov - President, Chief Executive Officer & Director: Thank you.

Jon A. Olson - Chief Financial Officer & Executive

Vice President: Thank you. Moshe N. Gavrielov - President, Chief Executive Officer & Director: I said the first thank you. Jon A.

Olson - Chief Financial Officer & Executive

Vice President: Okay, all right, Moshe.

Operator: Our next question comes from Hans Mosesmann from Raymond James. Hans C. Mosesmann - Raymond James & Associates, Inc.: Thanks. Hey, Moshe, on the going back to the 16-nanometer and the decision to accelerate and expand on the tape-outs and such.

How much of it is a result of a competitive dynamic? I understand the customers are eager, but perhaps there's another element here. Your competitor might be delayed or delayed significantly. How much of it is that potentially that you're taking advantage of an opening, if you will? Thanks. Moshe N. Gavrielov - President, Chief Executive Officer & Director: Okay.

Clearly we believe we have a year lead, potentially a more significant lead than that, and it behooves us to exploit it. And because our silicon is in such good shape and we can do multiple tape-outs and we're already shipping six products, which for us would be unheard of. This is a product we taped out at the very end of June. So it's only nine months since we taped it out and we already are shipping six derivative unique products. So that means that we've done six tape-outs, which means that it's really in very good shape.

And you're right that if we sit back and we have a very worthy competitor and we just let them, don't exploit that, we're likely to compromise the potential here. So, yeah, there is an element of that. That's on our core programmable logic business. But this goes beyond programmable logic because with 16-nanometer and with 7 and with Zynq, we can provide an alternative to ASICs and ASSPs and those are our nontraditional competitors. And obviously we just need to keep running as quickly as we can to maintain the lead we have in terms of technology, so it's both.

Hans C. Mosesmann - Raymond James & Associates, Inc.: Fair enough. And then a quick follow-up, please. On the Zynq side, on the automotive business, what's the competitive dynamic there? Are you gaining share? What's the size of the market? If you can just give us a little framework there as you look into fiscal 2017. Thanks.

Jon A. Olson - Chief Financial Officer & Executive

Vice President: Yeah, Hans, this is Jon. Let me take that one. So, we talk a lot about ADAS, and I think we get a lot of comparisons to what we're doing in the forward-looking cameras which is where we have a lot of strength, particularly in the stereo versions of those. But our ADAS business is really very broad.

So Zynq is a driver of it, and it's a driver of us not just in the forward-looking cameras, but also in some of the other safety and lane departure and those kinds of things as well. We have developed a really broad business in the automotive world, and it isn't just one competitor. There's a variety of competitors now that we're meeting. And when we talk about, when you see the presentations in May, I think you're going to see a lot more conversation around the breadth of what we have and why we're so confident about successive years of growth in this market. So in other words, FPGA technology is not just the programmable processing unit.

It's really broader than that for us, and we're doing really quite well. Hans C. Mosesmann - Raymond James & Associates, Inc.: Thank you. Very helpful. Jon A.

Olson - Chief Financial Officer & Executive

Vice President: Thank you.

Operator: Our next question comes from Tristan Gerra from Baird. Tristan Gerra - Robert W. Baird & Co., Inc. (Broker): Hi.

Good afternoon. You've talked about 5G starting to ramp in 2018. How should we look at the wireless infrastructure market between now and then? What's the status of the 4G ramping in Europe, and how should we look at wireless infrastructure trends over the next couple of quarters given kind of the turmoil that we saw in China last year?
Moshe N. Gavrielov - President, Chief Executive Officer & Director: So I'll give you my cut, and then I'm sure there's a lot of additional information Jon and Lorenzo can add. But we hit the low point in the June quarter of calendar 2015.

And that was a really low, low point. So if you do peak-to-trough, it was almost one-half of the peak or maybe even less than one-half of the peak. And what we have seen is it's recovering. We think there's a lot of things that happened because wireless is a multi-geography, multi-generation phenomenon on the infrastructure side. What we saw was there was the combination of all of the bad news on all of the fronts happened at the same time for us.

Since then, it has improved. We're seeing renewed deployment in China. We're seeing deployment in India, and this is all triggered around, this is not 5G. This is largely LTE. We think that LTE still has a lot of deployment left.

And that will probably, for the next few years, continue to carry things. What we're seeing which is very encouraging to us is if you go back a year or a year-and-half ago, the general feeling was that there would be no rush towards 5G. And that has sort of totally changed within the past year. And there now seems to be a race towards 5G with an amazing amount of prototyping and proof-of-concept being done now. And we actually have a great footprint there.

We expect a quasi-5G or an early 5G to be deployed in 2018 at a minimum in Korea, but actually I won't be surprised if there's some early signs in North America. And then 2020 onward, we expect it to grow. It's expected to be a very large market, and there's a lot of applications which are driving it. Smartphones, even though they're not growing, their footprint in terms of bandwidth is increasing, right? So maybe there's not that many new smartphones, but the refresh cycle is for ones which require more bandwidth and significantly bigger load on the infrastructure. And the applications are driving that and, the other one is the Internet of Things both on the consumer and the industrial side, and that's expected to generate totally new set of needs for infrastructure.

So we think it's a big market. Again, we'll shed some more light on that in May with people who are more expert in the field. Lorenzo Flores - Vice President-Finance & Controller: Yeah, I think despite Moshe's saying, Jon and I could have a lot to add, his answer was – it was fairly comprehensive. In the near term what we see is, as Moshe described, firming up the recovery from where we had been in the low points particularly in China, backfills geographically around the world, and ramp in India although we don't expect that to be of the same magnitude as China. And then finally, the 5G prototyping pre-production type of business is actually pretty good business for us this year.

Tristan Gerra - Robert W. Baird & Co., Inc. (Broker): Okay. Great. That's very useful.

And then a quick follow-up question. What opportunities do you see in small cell? I mean, we've learned obviously that the price points were high and have kind of delayed what people thought was a ramp starting a few years ago, but it looks like we're now starting to see signs in China notably. Do you expect to participate, or is that type of market naturally gravitating toward ASIC given the high volumes?
Moshe N. Gavrielov - President, Chief Executive Officer & Director: So that trend is continuing but certainly not as robust as people had indicated a number of years ago that it was going to be deployed. We are participating in small cells.

It is still a market that we can be in if we're talking about urban areas where there – where the number of users and densification requirement, so I would say not on the home or local kinds of things, but in urban areas where they're trying to augment macro base stations, we are playing in those, particularly in the radios. So, yeah, but we don't see it as a big offset to the long-term macro station. Tristan Gerra - Robert W. Baird & Co., Inc. (Broker): Great.

Thank you. Jon A. Olson - Chief Financial Officer & Executive

Vice President: Thank you. Next question?

Operator: And our next question comes from the line of John Pitzer from Credit Suisse. John William Pitzer - Credit Suisse Securities (USA) LLC (Broker): Yeah, good afternoon, guys.

Thanks for letting me ask a question. First, I just want to thank Jon for all the help over the years, I really appreciate it. Moshe, I know on an earlier question you kind of addressed that the OpEx guidance for the fiscal year 2017 is pretty back-half loaded. I guess I just want some clarification, how dependent is that OpEx number in kind of hitting the revenue guidance number you gave? If for some reason revenue were to come a little bit short, would that OpEx number have some modulation in it, or is a lot of that just kind of fixed OpEx based upon projects that you are planning on doing in the back half of the fiscal year?
Moshe N. Gavrielov - President, Chief Executive Officer & Director: Well, let's say there's a huge downturn and we're rational people, and we behave accordingly.

Right? So we generally realize that we have a responsibility here, and we take it very seriously. So if that happens, we will act accordingly. Lorenzo's guidance for the year is 4% to 8%, and we're not planning on some huge surge to justify this. We're planning on a gradual growth during the year. We think that's very reasonable given our strong design win situation, and the fact that we do see them moving into production now at a greater rate on the newer nodes.

So I'm not discounting that. Things happen. And if they do, we will act accordingly. John William Pitzer - Credit Suisse Securities (USA) LLC (Broker): That's helpful, Moshe. And then my guess is you'll address this in a lot more detail at the analyst day, and I'm not a huge fan of looking at seasonality because there's so much variance around seasonality.

But if I just pivot seasonally off your June guidance, I'm getting fiscal revenue year growth in 2017 that's more flattish versus kind of the 6% midpoint guidance you gave. I'm just kind of curious, can you give us some broad strokes as to what end markets or what product portfolios you think are going to start driving sort of better than seasonal growth as you go throughout the year?
Lorenzo Flores - Vice President-Finance & Controller: So let me take that, because I've actually looked at the issue of seasonality. I think the complexity of our business and the multi-market nature of our business makes seasonality a tough model to apply because we're more prone to be following longer term growth or decline trends than we are necessarily seasonal behaviors like, say, a retailer. And I know you acknowledged that up-front, John, but I think what we're really saying in this market environment, it is the continued growth of our new products which you can view as not being terribly impacted by seasonality. And the expansion into new markets which are also not impacted by seasonality that are driving our overall growth for the year.

And those would be the continued ramp of new products in our wired business, and I've made in my commentary, there's relative firmness in Wireless. Expansion in the Data Center, continued growth in the expansion opportunities we've developed in automotive. Those are the things that are going to drive us. And like I said, I don't see that kind of expansion impacted significantly by seasonality. John William Pitzer - Credit Suisse Securities (USA) LLC (Broker): Helpful.

Thanks, guys. Jon A. Olson - Chief Financial Officer & Executive

Vice President: Thank you. Operator, we can take one more question.

Operator: Our last question then comes from the line of Blayne Curtis from Barclays.

Christopher Hemmelgarn - Barclays Capital, Inc.: Hi. This is Chris Hemmelgarn on for Blayne. Thanks for squeezing me in. I just had a longer term question about the direction of the auto business and architectures there. I mean, the systems today are kind of a hodgepodge of ASICs and FPGAs, each controlling different functions and you've seen some players lay out a vision that involved more of a centralized control as the market matured.

You clearly have long-term engagements with customers. I guess what is the interest you're seeing? Are you still seeing, you know, them desiring discrete chips to drive each of these functions? Or are you seeing an interest in more of a centralized controller?
Moshe N. Gavrielov - President, Chief Executive Officer & Director: So we'll give some more depth here, but again this is an emerging set of applications, and there is various ways of skinning the cat. We do think that it won't all end up with one centralized monster processor regardless. Now, there may be more done centrally, or there may be less done centrally, but it won't all be done centrally for a whole host of reasons.

In order to enable this distribution, one of the biggest issues is of course the issue of security. And that's where our products, because the security can be built in our products, and embedded in hardware as opposed to software which can more easily be hacked and manipulated. We believe that we have a strong potential advantage as that turns out to be the case. Right? But I think this is going to evolve over 10 years, 15 years, right? And this is a long-term transition. And regardless, I don't think that even at the very end it will all be in one place.

I think, there will be lots of reasons for it to be distributed over. But for sure for the next two generations of products we don't see anything other than distributed solution. Lorenzo Flores - Vice President-Finance & Controller: Yeah, I think the whole issue with latency and you can't wait for a decision to be made by a processor unit to get information to the driver at essentially real-time speeds. And that's where we excel. And there will be many of those applications that are so critical to getting that information there, that you cannot stand any sort of a latency kind of an issue.

And that's where we're finding huge interest even in our more advanced products from customers. John William Pitzer - Credit Suisse Securities (USA) LLC (Broker): Very helpful. Thank you very much, guys. Rick Muscha - Senior Director, Investor Relations, Xilinx, Inc.: Thanks for joining us today. We'll have a playback of this call beginning

at 5:00 p.m.

Pacific Time, 8:00 p.m. Eastern Time today. For a copy of our earnings release and the fiscal year 2017 guidance we provided, please visit our Investor Relations website. Our next earnings release date for the first quarter of fiscal year 2017 will be Wednesday, July 20, after the market close. As we mentioned earlier on the call, we'll be holding our annual analyst day in Boston on May 23.

We look forward to seeing you there. This completes our call. Thank you very much for your participation.

Operator: This does conclude today's call. You may now disconnect.