Executives: Rick Muscha - Xilinx, Inc. Lorenzo A. Flores - Xilinx, Inc. Victor Peng - Xilinx, Inc. Analysts: Ambrish Srivastava - BMO Capital Markets (United States) Toshiya Hari - Goldman Sachs & Co.

LLC Blayne Curtis - Barclays Capital, Inc. C.J. Muse - Evercore ISI Tristan Gerra - Robert W. Baird & Co., Inc. John Vinh - KeyBanc Capital Markets, Inc.

William Stein - SunTrust Robinson Humphrey, Inc. Joseph Moore - Morgan Stanley & Co. LLC John William Pitzer - Credit Suisse Securities (USA) LLC Kellan Grenier - Nomura Instinet Philip Lee - Citigroup Global Markets, Inc.

Operator: Good afternoon. My name is Jessie and I'll be your conference operator.

I would like to welcome everyone to Xilinx's Fourth Quarter Fiscal Year 2018 Earnings Release Conference Call. Please limit your questions to one to ensure that management has adequate time to speak to everyone. I would now like to turn the call over to Rick Muscha. Thank you. Mr.

Muscha, you may begin your conference. Rick Muscha - Xilinx, Inc.: Thank you, and good afternoon. With me are Victor Peng, CEO; and Lorenzo Flores, CFO. We will provide a financial and business review of the March quarter, and then we'll open the call for questions. Let me remind everyone that during our conference call today, we may make projections or other forward-looking statements regarding future events or the future financial performance of the company.

We wish to caution you that such statements are predictions based on information that is currently available and that actual results may differ materially. We refer you to the documents the company files with the SEC, including our 10-Ks, 10-Qs and 8-Ks. These documents contain and identify important risk factors that could cause the actual results to differ materially from those contained in our projections or forward-looking statements. In Lorenzo's prepared remarks, he will make several non-GAAP financial references. A complete reconciliation to the most directly comparable GAAP financial measures can be found on our Investor Relations website immediately following this call.

This conference call is open to all and is being webcast live. It can be accessed from our Xilinx's Investor Relations website. Let me now to the call over to Lorenzo. Lorenzo A. Flores - Xilinx, Inc.: Thank you, Rick.

Xilinx delivered record revenue of $2.539 billion in fiscal year 2018, up 8% from FY 2017, and at the high-end of our guidance we provided at Analyst Day. This revenue growth was driven by our Advanced Products, which grew 28% over the previous year and broad-based growth across our end markets. All end markets outside of communications grew in fiscal 2018. Gross margins remained very strong throughout the year, averaging over 70%. Operating margin for the year came in at 29.3%, excluding the unusual cost associated with our executive transition in Q4, our operating margin exceeded 30% for the year.

For the fiscal year, Xilinx generated $1.99 of GAAP earnings per share. As we noted last quarter, the impact of tax reform on our earnings was significant. We also had the expenses related to our executive transition. Without those items, our EPS would have been approximately $2.72 a share, a growth of 17% over FY 2017. Now for the March quarter.

Sales increased to a record of $673 million as we exceeded the top end of our guidance range. We were up 7% sequentially and 10% year-over-year. Our revenue was driven by broad-based growth in our Advanced Products, which were also up 7% sequentially and up 28% year-over-year. All of our primary end markets grew with particular strength in Industrial, Aerospace and Defense. Gross margin for the quarter was 70.7%, in line with our guidance.

Operating expense was $286 million. Core operating expense, including approximately $33 million of one-time charges related to our CEO transition was $253 million. Operating income for the quarter was $190 million or 28.2%. Excluding the executive transition costs operating margin was 33%. Tax rate was 10.9% for the quarter, higher than we guided due to additional expenses related to tax reform legislation.

Our net income for Q4 was $166 million or $0.64 per share. Now I'd like to highlight a few key points on the balance sheet and cash flows. We ended the fiscal year with $3.4 billion in gross cash and $1.7 billion net cash after our debt. During fiscal year 2018, we generated $795 million in operating cash flow, and we returned $827 million to shareholders in the form of dividends and share repurchases. Our board recently authorized an increase to our dividend for the 13th consecutive year.

In the fourth quarter, operating cash flow was $218 million, and we returned $253 million to shareholders in the form of $89 million in dividends and $163 million of share repurchases. We bought back approximately 2.3 million shares for an average price of approximately $71 a share. Since inception, we have utilized $793 million of our $1 billion share repurchase program. We have repurchased 12.9 million shares at an average price of approximately $61.50 a share. We ended the year with 258 million shares, down from 267 million at the end of last fiscal year.

We now have at $207 million remaining on our share repurchase authorization and are continuing to execute on our program. Now for guidance. In the June quarter, we are expecting sales to be between $660 million and $690 million. We expect turns of approximately 40% to achieve the midpoint of this guidance. With regards to primary end markets, we expect communications and data center as a group to be down reflecting the impact of the denial order on ZTE, although the data center element will be up modestly.

Industrial and A&D will be down, will also be slightly down after several consecutive record quarters. Broadcast, consumer, automotive is expected to be modestly up. Our guidance reflects an estimate of the effect of the mandated adoption of ASC 606, which moves us from a sell-through to a sell-in model. In the next few weeks, we will be publishing on our Investor Relations website a more complete discussion of the estimated impact of ASC 606 on our financials. Our gross margin is expected to be approximately 69% to 71%.

We expect operating expense to be approximately $260 million. Our tax rate is expected to be between 10% and 14%. Let me now turn the call over to Victor. Victor Peng - Xilinx, Inc.: Thank you, Lorenzo. Good afternoon, everyone.

I'm pleased to report that our focus on accelerating top line growth has delivered record revenues of $2.5 billion in fiscal year 2018, an increase of 8% over fiscal year 2017. Growth was broad-based and driven by the strength in the majority of our end markets. I'm extremely excited about the future of our business as we execute on our mission of building the adaptable, intelligent world. Recently, I described our strategy are to consist of three elements, data center first, accelerating revenue growth in our core markets and driving adaptive computing. I also announced a new product category, Adaptive Compute Acceleration Platform or ACAP and our Everest project, which will deliver the industry's first 7-nanometer ACAP product family.

We are on track for tape-out of our first ACAP product later this year. We've established significant momentum in the data center end market over the past fiscal year both developing the foundation for and building out a vibrant ecosystem. For example, we now have trained more than 400 developers with approximately 300 in the March quarter alone, on how to develop for our AWS's Xilinx based F-1 instances. We've continued to invest in our SDAccel development environment and middleware library, making it easier for software developers to program our FPGAs using industry-standard APIs and frameworks. As an example, we recently released a machine learning speed on the AWS F-1 environment to support for TensorFlow.

We expect the data center to be our fastest-growing end market in the near term with significant revenue levels over the longer term. Xilinx has been evolving for an FPGA focused company to Zynq-based platforms and soon, ACAP platforms. Our transformation has been underway for the last several years through the integration of powerful SoCs and through our programmable chips, developing 3D ICs, developing software development suites and creating partner ecosystems. Our Zynq SoC products are ideal for platform architectures and are a critical element of our multimarket expansion. Our 28-nanometer Zynq and 16-nanometer MPSoC product have achieved a new sales record, growing more than 60% year-on-year.

Our RFSoC family, which has a breakthrough architecture with integrated RF-class analog technology, will be in full production by the middle of this year. The RFSoC has exceptional design-in momentum with product shipped to about 30 customers to date across multiple end markets and applications. We will build on our momentum at the data center and accelerate our growth in our core markets with our new strategy for sustained, robust long-term growth and delivering shareholder value. I look forward to sharing more details about our strategy and plans for FY 2019 and beyond at our Analyst Day in May. Let me now turn it back to the operator for Q&A.

Operator: Your first question comes from Ambrish Srivastava from Bank of Montréal. Your line is open. Ambrish Srivastava - BMO Capital Markets (United States): Thank you very much, Lorenzo and you can almost predict which question I am going to ask you. Accounts receivable, I know in the past they've gone up, but this time looking at two quarters in a row on a year-over-year basis now, does it have to do with the new rev rec?
Lorenzo A. Flores - Xilinx, Inc.: No, not really, because we haven't implemented the standard yet.

We will in FY 2019. What's happening with accounts receivable, again, it's similar to what I have said before when they're high. It's the shipment patterns during the quarter. And again, in this quarter, again we had some back-end loaded shipments. So it is actually, to be perfectly candid, I'd like to drive the days down and get that gross number down and bring the cash back into the company so we'll be working on it.

But there's no collectability concerns again, and it's just it's a timing thing. We just need to keep working at it. Ambrish Srivastava - BMO Capital Markets (United States): Okay. In the past, you have reversed it. Then my follow-up is for Victor.

On ACAP, this seems to be pretty revolutionary at least the way I'm looking at it. But in terms of revenue opportunity, how much does it, what new TAM does it open up versus cannibalization of existing offerings because we're always worried about that for FPGA companies is how much of the existing business are you cannibalizing? So, if you could please explain kind of how to think about the new opportunity that'd be great? Thank you. Victor Peng - Xilinx, Inc.: Yeah I actually think that there'll be significant SAM extension. As I shared when I unveiled ACAP as well as the overall strategy is that one of the goals that we have as a company is to start enabling software developers to use our very powerful platform and the ACAP will definitely give a huge boost to that. We're not waiting for that.

I mean we're doing that even today with our 16-nanometer in fact even some of our early products. I mean, one way to think about it is, if you think about our Zynq, first generation of Zynq, and then the MPSoC which is the second-generation, that's already getting both TAM expansion as well as some refresh of existing sockets its but definitely already gotten SAM extension. ACAP is kind of a quantum leap beyond the Zynq platforms but you could look at it and say those are the closest (13:18) in terms of generation goes, okay? So I expect significant SAM extension. And in terms of revenue we're taping out this year and most of the revenue will be out a year beyond that. And, as you know, a lot of our markets take some time to ramp but then product life is quite long.

Ambrish Srivastava - BMO Capital Markets (United States): Thank you.

Operator: Your next question comes from Toshiya Hari with Goldman Sachs. Your line is open. Toshiya Hari - Goldman Sachs & Co. LLC: Hi.

Thanks for taking the question. You guys talked about embedding the risk related to ZTE in your guide to the extent you're comfortable talking numbers here, how big is that impact? And, I think there was a report about the DOJ investigating Huawei as well. So again how should we handicap that part of your business as well going forward?
Lorenzo A. Flores - Xilinx, Inc.: So I think I want to just start with saying we don't have any 10% customers which we would be obligated to disclose obviously nor do we really have anyone that's close. But with respect to ZTE, and I think I'll answer in advance some of the questions that may come up, we are certainly aware of the denial order and we are certainly in compliance with the denial order.

And as we went through the quarter and into our guide you should look at the broader strength of the business and the relative proportion of communications with respect to our business to get a sense for how we can get to another strong quarter despite these headwinds with ZTE. So with Huawei specifically we're aware obviously of the press report on it, and we're just monitoring the situation. Toshiya Hari - Goldman Sachs & Co. LLC: Okay. So for ZTE is it fair to assume that you guys are assuming pretty much $0 revenue going forward?
Lorenzo A.

Flores - Xilinx, Inc.: For this quarter?
Toshiya Hari - Goldman Sachs & Co. LLC: Okay. Lorenzo A. Flores - Xilinx, Inc.: But we did have two weeks of business before the denial order. Toshiya Hari - Goldman Sachs & Co.

LLC: Okay got it. And then as a quick follow-up, Victor, on your ACAP business I think in the press release you talked about spending about $1 billion in R&D over the past four years on this platform, which obviously, isn't necessarily a small number for you guys. As we think about R&D over the next couple of years, should we expect similar growth in your R&D profile, or do you think perhaps, the growth rate in R&D could come off a little bit now that you're over the hump?
Victor Peng - Xilinx, Inc.: Well, let me just say. I believe this is the first time we ever kind of shared the level of investment for a particular program. So I'm going to give a little context there.

Overall, it's not entirely, I mean, it's not at all unusual that we have to invest a fairly long period of time and prior to tape-out, there's a lot of investment that goes into it even before your very first tape-out. So in that qualitative respect, Everest is no different but on an absolute basis because of the, how powerful that platform is, it's a new product category, there is, on a relative basis, more investment and it is 7-nanometers. So of course, 7-nanometers of advanced technologies is also complex and requires additional investment, but I do want to be clear that it's not like fundamentally different. We have fairly long development cycles, and we have extremely long and robust revenue cycles to go with that. In terms of overall OpEx guide.

I think we're going to be discussing at (17:15) where we're going to be at Analyst Day. So I don't think it's appropriate for me to share that at this point. But I would say, I've been pretty consistent in saying, we're always trying to balance the right thing between investing for sustained long-term growth and to an earlier question things like SAM extension but also giving good return to the shareholder. So we always try to do a thoughtful balance of the two. Toshiya Hari - Goldman Sachs & Co.

LLC: Thank you.

Operator: You're next question comes from Blayne Curtis with Barclays. Your line is open. Blayne Curtis - Barclays Capital, Inc.: Hi, guys. Thanks for taking my question.

I just want to ask you in the consumer bucket if you've seen a tailwind from cryptocurrencies, just kind of curious, most of the currencies have fallen off a bit, I was just kind of curious to your outlook of that into June? And maybe if you can just address at a high level your positioning on any future generations, there's been a lot of talk about new boxes, just curious your positioning there, as maybe an offset if some of the currencies pull back?
Victor Peng - Xilinx, Inc.: Sure. I mean, as you know, the last quarter is the first time we ever talked about crypto because it was becoming somewhat material, and we did feel that while it's very volatile, we see that we are supporting those customers, we're trying to, of course, building products and trying to make them successful. But if you recall, we did say that we were talking about low $10 million kind of exposure as opposed to what you guys hear from like the GP world, for instance. I would say nothing's really changed from that. And again, and we all know that it's volatile, so that's also not changed.

The number, the volatility's baked into the current guide. And again, we'll discuss that a bit more maybe in the Analyst Day. Blayne Curtis - Barclays Capital, Inc.: That's very helpful. And then I just wanted to ask about the strength in Industrial, A&D, maybe just some comments on the sub segments there as well as slightly down into June. What are you seeing that maybe it's moderating the June?
Lorenzo A.

Flores - Xilinx, Inc.: So a couple of things moderating the June. So we've had a string of record quarters in test measurement and emulation specifically, which was one of the drivers of the strength for the year. And we've also had a couple of very good quarters in a row of industrial, the aerospace and defense part of Industrial, Aerospace and Defense. So those things are a little off, but there's some volatility always in that. And there's been offsetting strength in industrial scientific and medical piece of that, of the business.

So all in all, I think the general trend is up. If you go back through the quarters, some will be stronger than others on a quarter-to-quarter basis, but that collection of end markets that we call industrial and aerospace and defense has been quite strong for us through the year. Blayne Curtis - Barclays Capital, Inc.: Okay, thanks.

Operator: Your next question comes from C.J. Muse with Evercore.

Your line is open. C.J. Muse -

Evercore ISI: Yeah, good afternoon. Thank you for taking my question. First question, as you think about hitting 10% year-over-year growth in the March quarter, and you're midpoint of the guide, almost at that level.

Curious if that's a sign of a new normal for you guys as you broaden up the breadth of your portfolio, and you bring in new offerings into the data center? Would love to hear your thoughts on how we should think about the trajectory here?
Victor Peng - Xilinx, Inc.: Yeah, it's Victor. So as I said, when we unveiled the strategy, we are pushing growth more vigorously. I took over being CEO last April, so really have had sales under me for the full year and while we didn't come out with a strategy statement, I certainly as owning sales and marketing, drove that and then just earlier in the year, we came out very explicitly and said that. So again, you'll hear more at the May Analyst, but absolutely, we have been pushing more aggressively on growth and that's a combination of just doing really well in our core business as well as seeking areas of new growth. The data center continues to be building well, but it's not very material revenue right now and because it's an emerging area it have kind of some friskiness, but we're very happy with them there, but certainly as Lorenzo already covered, a lot of our core businesses, A&D from a year was a record, TME is a record, ISM, industrial was strong.

So we have broad strength, and we're going to continue to drive that as hard as we can. C.J. Muse -

Evercore ISI: And if I could just ask a quick follow-up. Lorenzo, you've got I think $1.7 billion in net cash. You're on track to $900 million-plus free cash flow per year.

I think you've been buying back around $500 million per year. Would you consider being more aggressive, considering the trend line that we're seeing here from a free cash flow perspective?
Lorenzo A. Flores - Xilinx, Inc.: So I think the overall capital allocation strategy is yet another thing we'll address in greater depth at our Analyst Day. But I will tell you that the principles have not changed, which is first and foremost, we want to invest in growing our business. Now historically, we have been mostly doing that with organic means, and we've been more, I guess, open recently to considering inorganic opportunity as well, but we still continue to pay a dividend.

We did grow our dividend again this year, and then a portion of our capital allocation will always be allocated to share repurchase. But beyond that, more specifics, you'll hear later. I don't know if, Victor, if you want to flesh out any other thoughts on that?
Victor Peng - Xilinx, Inc.: No. I think (23:35) I'll also share that we got a new strategy. We're driving for growth.

The inorganic means is a tool. And I think if we see opportunities that align strategically, also meets the right of course objectives we have for revenue and profitability, we'd exercise that tool. So I think that's what Lorenzo was saying, if we start seeing that, there might be some obvious modulation to take that into account, but otherwise after that, we'll continue the same basic philosophy I suppose. That help?
C.J. Muse -

Evercore ISI: Thank you guys.

Operator: Your next question comes from Tristan Gerra with Robert Baird. Your line is open. Tristan Gerra - Robert W. Baird & Co., Inc.: Hi, good afternoon. Looking at your core product, it was up 6% sequentially.

Typically, that's a line item that tends to decline, so would you characterize the strength in the March quarter as a one-time, and what drove their increase?
Lorenzo A. Flores - Xilinx, Inc.: No, I think overall, it was up from the prior quarter but it's a similar run rate as the earlier quarters of this year. It is the, obviously, the older products and over time, we would decline. But I think it's part of our business that we have not lost focused on. We have not lost focus on, and we continue to drive, along with the Advanced Products portfolio.

So in general, it should decline, but it is not any different from where it is at the beginning of the year. Tristan Gerra - Robert W. Baird & Co., Inc.: Okay. And then you had mentioned in prior quarters having a significant lead in 5G and earning pretty much all the proof-of-concept. As we get closer to mass deployments, any quantification of the opportunity, perhaps from a content perspective, versus 4G or timing, and whether 5G you think gives you confidence that it can offset some of the 4G declines that we are going to expect next year?
Victor Peng - Xilinx, Inc.: I guess what I'd say is the overall message that we've been in all these proof-of-concept and early deployment, that's certainly true.

And we've also said, in terms of more meaningful production ramp, that's more in the 2020 timeframe. We believe that continues to be true. I do think in terms of content, it quite varies a lot because 5G is not just traditional macro base stations, right? It's small cell, there's IoT, there's also a multi-band. So I think diversity and the types of systems that are falling under quote-unquote the 5G umbrella is way broader than any other previous generation. So it's really kind of a hard thing to say.

You'd actually have to narrate it more down to say what our content level is. Again, I don't want to the sound like a broken record, but we could add more color in the investor conference. And then certainly, of course from a wireless perspective, now with the ZTE denial, there's also just we'll have to see how that unfolds and again, we're not going to have any further comments now but hopefully, there'll be more information by the time the investor conference occurs. Tristan Gerra - Robert W. Baird & Co., Inc.: Great.

Thank you.

Operator: Your next question comes from John Vinh with KeyBanc Capital Markets. Your line is open. John Vinh - KeyBanc Capital Markets, Inc.: Great. Hey, thanks for taking my question.

Just a follow-up question on the comms business. Obviously, you've seen year-over-year declines the last three quarters. There's apparently a lot of headwinds with the ZTE ban and kind of declines in kind of carrier CapEx this year in China. Is there an opportunity, do you see, for the comms business to stabilize this year, or should we take a more conservative view and assume that we're going to see slight declines until we get to 5G in 2020?
Lorenzo A. Flores - Xilinx, Inc.: Yeah again with the newness and the lack of solid information at this point of the ZTE situation, it's really hard for us to comment now.

We again, we've fully contemplate that fully complying with denial in this whole quarter. We certainly hope by the time we have the investor conference we have better visibility on that. But, some of the other trends minus that recent development continues to be true, right, everybody knows CapEx is actually trending down until 5G really takes off. In one sense, even though there's a lot of people saying that the initial deployments are earlier but the volume when the verbiage was sustainable, back again I don't see any change from around the 2020 timeframe. But counter balances, things like the RFSoC which is really as disruptive, there's no product like that, we're very confident about the traction that that product's going to have, not only 5G but other markets.

So, there's some really good things but I do think that especially in particularly in light of the near term thing it's hard for us to comment on modeling this. Victor Peng - Xilinx, Inc.: Right, yeah. John Vinh - KeyBanc Capital Markets, Inc.: Great. And then my follow-up question for you Victor is on ACAP. I was wondering if you could just give us a little bit more commentary on what you think ACAP is and is not.

My understanding is that ACAP is going to have kind of B-share cores and what MPSoC is, is this something that you primarily envision for kind of a more embedded in edge applications or do you think ACAP is something that can be applied within the data center and can be used without need for discrete GPUs?
Victor Peng - Xilinx, Inc.: Yeah, that's a great question. I mean I see ACAP being broad that it will be at the edge, in the cloud, I mean pretty much end to end. Obviously it's a scalable architecture. So like some of our architectures' today that can scale from pretty very cost and power focused applications to sort of pretty much performance is number one criteria or objective. So I think it has that breadth.

In terms of what it is, I mean it is already a heterogeneous multi-core architecture, right? And there are elements that we will share through the course of the year, a little more technical detail that will help people better understand why it is such a quantum step forward. I think that it certainly will be able to displace other embedded processes in some cases but if I look at the broader scope of things, CPUs will be around. I think GPUs will have its place. I think ACAPs will be ACAP based systems will also be a more mainstream targeted platform and it's going to be in the long run, also a very significant platform so not just in the cloud but in the edge, of course and it's multimarket. So you shouldn't think of it just in terms of the cloud.

So you'll hear more and that's why I say we've already seen SAM extension and movement for people developing towards the Zynq and FPSoC and ACAP it's just going to take that a big step forward.

Operator: Your next question comes from William Stein with SunTrust. Your line is open. William Stein - SunTrust Robinson Humphrey, Inc.: Great. Thanks for taking my questions.

A couple of sort of follow-ups on end markets, can you remind us what the goal was in the server acceleration market? I think you had a revenue goal by 2020? And if you could maybe remind us or refresh that? And similarly on automotive, I know that there's been good adoption of your products in certain ADAS applications, if you could update us on that end market that'd be great. Thank you. Victor Peng - Xilinx, Inc.: Yes, I think in the past, you sort of said it, data center could be in the range of $200 million to $300 million, call the midpoint $250 million by 2021. We did say that we will update that estimate at the investor conference, but you can qualitative, it will be significantly more than that. We really see that opportunity as being much broader, much larger, and we're going to go and go after that opportunity more aggressively, obviously, with the first element of the strategy being data center first.

So you'll hear more about that in May. On the automotive side, again, automotive continues to grow and of our automotive business, roughly 70%, 75% of it's ADAS and the majority of that is Zynq-based. And if I look at the ADAS segment that continues to grow more than the general automotive segment, and it's been going strong and it's largely been, 28 nanometers, the first-generation Zynq. So we've had for the past year, significant wins in design and activity with the MPSoC, the second generating Zynq, but those things have not really gone to production, right. So again, as you know, automotive is still a pretty long development cycle, and then ramped production.

So I'd say, we expect the ADAS to continue to grow but the next kind of big driver is when the MPSoC, the 16-nanometer stuff kicks into production. We are seeing some of that, that's still advance ADAS, we are seeing some of that going to autonomous driving, but we think ACAP, right, which, again, it covers multi-markets, including automotive. ACAP, that will be the platform that goes more into autonomous vehicles. Okay. So that's, to help you with the kind of the road map succession.

William Stein - SunTrust Robinson Humphrey, Inc.: Yes, helpful. Thank you. Victor Peng - Xilinx, Inc.: Okay.

Operator: Your next question comes from Joe Moore with Morgan Stanley. Your line is open.

Joseph Moore - Morgan Stanley & Co. LLC: Great. Thank you. I wonder if I could follow up on the inorganic growth comment and maybe if you could just kind of tell us the scope of things you might think about there. I mean, you've talked about being more than an FPGA company but so far, all of this has been sort of things like Zynq and RFSoC, that are attached to an FPGA fabric, is that still the thinking that this is going to be very FPGA-centric, or would you – how adjacent are the opportunities that you might be looking at?
Victor Peng - Xilinx, Inc.: Yes, Joe, I mean, I guess, what I'd say is, obviously, I can't talk about any specifics, I'd say, it would be to look to see how we can accelerate our strategy, which data center is a bigger element, right, and just again, our opportunity in the data center is quite broad, right, like, a lot of people think of data center is just on the compute side, right, but we really play in compute acceleration, we play in storage as well as networking, and there's really as you well know, there's a lot of disruptions at all three of those areas.

So one way you can think about it, just within that element of our strategy, we could actually look at potential opportunities at any of those sub-segments. Now the second element of strategy is to so accelerate the growth in our core business, so that also – so I'm not taking in any way taking off the table what may not be on the chess board, things related to some of our core business, okay, but it is going to be driven about what's going to really drive our growth and some of the directional things you want to do. If I look at the third element just talking about in general driving adaptive computing, that's more of a feature kind of a strategy. So it could also be in that sense, you could say, it could also be technologies and things that help drive that. So, yes, again, as you can imagine, of course, I can't give any specifics, but I think we'll be looking quite broadly anything from, which we've done before, talking from technology all the way to actually significant businesses.

Joseph Moore - Morgan Stanley & Co. LLC: That's helpful. Thank you. And then I wanted to ask about the strength in Zynq. You talked about 60% growth.

I mean, it looks like that's, sorry, you crossed over 10% of revenues at one point in the year, it seems like then drove a health portion of your growth for the year. What's the right way to think about that, is that sort of your growth, there's a higher attach rate of Zynq, and so it's growing that much, or is it actually kind of driving new TAM opportunities and new revenue opportunities?
Lorenzo A. Flores - Xilinx, Inc.: Yes. So there's a very important aspect of Zynq that you have to keep in mind, and Victor alluded to it earlier when he was discussing automotive. The first Zynq platforms, our 28-nanometer platforms, we launched, it was a SAM expansion play for us.

It opened markets for us that we weren't as well suited for in the past and with a programmable platform we were able to address new markets, and ADAS is a great example of it. Then with the second-generation 16-nanometer MPSoC, we're expanding that and reaching into even more markets. So it is a fundamentally market expansion play for us. It took a little bit longer as we've acknowledged in the past for it to ramp than we expected, but it is now, I think, a core part of our product strategy going forward. And because of the nature of Zynq as a platform, we think it's durable and sticky going forward.

So we'll continue to expand our markets and it helps us grow with customers as well. Victor, you want to add anything?
Victor Peng - Xilinx, Inc.: Yes, no. I mean, again, I think the key thing that we're seeing, as I mentioned, this thing of platforms, we're seeing that cut across all segments, frankly. No one's doing, deploying single customized solutions, everybody's moving to platforms. And again, I think its part of the overall thrust of things wanting to be intelligent as well as connected, and so based on that even companies that traditionally have done point solutions aren't doing that.

So I think Zynq is just an ideal turning point system core product for those kind of platform architectures. Joseph Moore - Morgan Stanley & Co. LLC: Great, thank you very much.

Operator: The next question comes from John Pitzer with Credit Suisse. Your line is open.

John William Pitzer - Credit Suisse Securities (USA) LLC: Yeah good afternoon guys. Congratulations on the strong results. Lorenzo, I apologize if I missed the detail. It sounds like you guys are going to provide some further information, but just relative to the accounting change that starts in the June quarter, is there any way to quantify the magnitude? Is it a one quarter issue that then subsides into September? How does it I guess change the trajectory of revenue throughout the year? And how big of an impact is it to the June quarter guide?
Lorenzo A. Flores - Xilinx, Inc.: So I'll answer the question first with kind of a more qualitative explanation of what's going on, not just for you, but for other people who might be interested.

So, and then I'll talk about how we expect it to impact our business long-term. So, this is a change which moves us fundamentally, as I said, in my remarks from a sell-through model to a sell-in model, and the management of inventory in the channel become particularly important, and we have started to work with our channel partners to implement programs to manage that. And we're managing that inventory with these new processes pretty rigorously. So as we moved into this fiscal year we managed down the inventory in the channel and it probably will be some degree of restocking through the year. Over time that aspect of our business should trend with our overall business.

In other words, the channel is a key part of our structure. So it should be something you look at and it trends with the business. Disti inventory levels should level, should stay at, get to a steady state in the future and then stabilize on kind of on a days basis like other inventory. But there will be movements up and down over time. So I'm not quantifying it specifically for this quarter because we're just, we're going to manage through it with our channel partners to get to the right level for their customers.

But we are certainly going to be transparent about it when we disclose our results. The quantitative aspect of it will be something that we will be able to show you in more detail with the release that I mentioned also in my comments. So I'll give you some context for the history of its impact on us and obviously, the basis for comparing FY 2019 to history, so. John William Pitzer - Credit Suisse Securities (USA) LLC: But Lorenzo, just so I understand, so the June quarter to the extent that you have product in the channel today that was on sell-through and is going to sell-in, will you get a revenue benefit in the June quarter?
Lorenzo A. Flores - Xilinx, Inc.: Will you repeat your question? I heard it but I'm not sure I understood it.

John William Pitzer - Credit Suisse Securities (USA) LLC: Will there be a positive revenue benefit? Other companies who have gone through this transition have seen a one-time increase in revenue as they've taken stuff that's already in that channel waiting for sell-through recognition and turned it into sell-in recognition. Will you see a similar impact in your June quarter guide or not?
Lorenzo A. Flores - Xilinx, Inc.: So I don't know that the dynamics are exactly the same as those you're referencing, but I'd say the higher-level point, we expect it to be positive this quarter because of the way we've managed the inventory through this transition. John William Pitzer - Credit Suisse Securities (USA) LLC: Perfect. That's helpful, and then Victor as a follow-on you did a good job talking about the acceleration opportunity.

I'm just kind of curious, when you specifically look at the investment in the software stack in that market, what inning would you say you're in relative to that development? I guess more importantly, to what extent does that work help you exploit other markets across your end markets? And where do you think it would be particularly helpful going forward?
Victor Peng - Xilinx, Inc.: Yeah, I would say we made tremendous progress last fiscal year and we have plans I think even continue to build on that and make tremendous progress this fiscal year. I think I've shared and just candidly that we have had great progress and we are not saying we're done. I mean, this is going to be a multi-year thing. Having said that, we are seeing the fruits of that. I mentioned some of the developer training and other things that we're seeing.

And then in terms of, is this only something that would help us in sort of the data center area or do we see it elsewhere. We absolutely see it elsewhere, absolutely. Because even our traditional customers in most cases have, virtually almost all of the sizable customers, have more software developers, more systems people than they have hardware people of any sort, ASIC, FPGA of any sort. And even though if you have plenty of FPGA expertise, us enabling, providing development suites and other things, libraries and so forth, third parties that can also bring in other domain expertise to help them develop at a much higher level of design abstraction and bring new products and new capabilities to market very rapidly, is, resonates with them. And so we definitely have customers in comms that are interested in some of the things we're doing in cloud and in auto.

I mean, I think it's no secret, right, there's a lot of big players, people that have some significant programs that kind of cross pollinate. So, but I think moving all the way out there, I mean, that takes a bit longer because of the fact it's just in the nature of some of those markets are a little bit stronger. But we definitely see that interest already, no question about it. John William Pitzer - Credit Suisse Securities (USA) LLC: That's helpful. Thanks guys and congratulations.

Victor Peng - Xilinx, Inc.: Thank you. Lorenzo A. Flores - Xilinx, Inc.: Thanks.

Operator: Your next question comes from William Stein with SunTrust. Your line is open.

William Stein - SunTrust Robinson Humphrey, Inc.: Great. I just wanted to follow-up on the data center comments. Victor you said that the update's likely to reflect a much bigger TAM opportunity than $250 million by, I guess, calendar 2021 that you'd discussed before. Can you give us a sense as to the linearity? Is it something that you expect growth will be slower and then suddenly balloon around that timeframe? Or is this more of a linear process? Thank you. Victor Peng - Xilinx, Inc.: I don't think it's linear.

But of course, it's always at your peril, sort of guess and describe the tech shape of an inflection point. But I think I've been saying for a while that, look, we're laying foundation, we're building ecosystem, we're building that software development environment that improves the ease of use, lowers the barrier to developers, so on and so forth. ACAP is going to take it to a next level, but I think we've been pretty consistent that it's a midrange long-term thing. That said, it's not just going to be this linear thing. I do feel that at some point, we get enough applications, enough developers, we've made it easier.

We've educated people. We have the mindshare that people won't – our thinking was always, oh yeah, that's the FPGA leader, right? We're the inventor of the ACAP, and the ACAP is a hardware and software programmable platform that is going to have legs from end-to-end, right, from the edge to the cloud. And I think that over time, that will give us very robust growth. But and again, you'll hear more of what we think in the investor conference but calling the exact shape, of course, I think that's probably not realistic. William Stein - SunTrust Robinson Humphrey, Inc.: Got it.

Thank you.

Operator: Your next question comes from Romit Shah with Nomura Instinet. Your line is open. Kellan Grenier -

Nomura Instinet: Hi. This is Kellan Grenier for Romit.

Thanks for taking our question. I was just wondering another follow-up on ACAP we were just looking for an update on how you're thinking about the number of tape-outs at the 7-nanometer node. So we assume that spending implied somewhere in the range of 15 to 20 tape-outs at 16-nanometer. And I know you mentioned last year's Analyst Day, that given the heightened spending commitment you could have smaller number of tape-outs for 7-nanometer, while achieving the same kind of broad offering, so just wondering if there's any update there?
Victor Peng - Xilinx, Inc.: Yes. I don't think we ever gave the exact number, and I wouldn't do that again.

I would also say that obviously, you have – you guys just want to know tape-out over what period of time, too, and we're not going to give that level of precision. I would say that I believe the ACAP is such a powerful architecture. I see 7-nanometers a long lived node, if you will. We're developing the architecture to be modular, excuse me, and quite scalable. In some respects, you could say over the fullness of time, there may be more tape-outs, but tape-outs per unit time, obviously, we'd try to make sure that, that's the right balance.

And also because, I think we've done so much innovation in architecture that also means that it's not like we have to feel like we need to get to the 5-nanometer node as rapidly. Because of course, 5-nanometers is going to be – we've been investigating and working on that, and working with TSMC, but it's not cheap technology, right? So I don't think it's as simple as the tape-outs going down. I mean – but again, I think really as that gets reflected in OpEx when we talk about how you should think about the FY 2019, you kind of get a sense of that. Kellan Grenier -

Nomura Instinet: That's helpful.

Operator: Your next – your last question comes from Chris Danely with Citigroup.

Your line is open. Philip Lee - Citigroup Global Markets, Inc.: Hi. This is Philip Lee on behalf of Chris Danely. Thanks for letting me ask a question. You guys mentioned you're seeing some impact from 5G in 2020 in terms of production ramp.

Are you seeing any benefit from any pre-5G activity right now or next calendar year?
Victor Peng - Xilinx, Inc.: I mean, we're definitely seeing benefit, because we're having great engagements with the customers and everybody's looking at – 5G is quite disruptive. People are rethinking architectures, how they architect. Again, these systems which are far, far, far more than just simple macro base station. I also mentioned the RFSoC being a disrupted device. People are re-architecting how they're doing the radio.

It supports more than just 5G, it's in massive MIMO, in general, which doesn't have to be 5G, right, as well as in the other applications. So yeah, I think the customer – the customer engagement level is great. We are learning and our customers are learning of our new capability. And I do think over the longer stretch of time, that's a great opportunity. But again, in terms of revenue ramp, we continue to see that's more of a 2020 timeframe.

But, yeah, we've definitely seen good deployment of the early proof of concepts in the product. Philip Lee - Citigroup Global Markets, Inc.: Thanks, Victor. And as a follow-up, you talked about your 7-nanometer progress there. Can you tell – can you remind us where you line up against the competition? How far of a lead do you think you have ahead of them?
Victor Peng - Xilinx, Inc.: Well, I haven't really heard that much about the details of exactly what they're doing And I would also say the following is that, I mean, I'm sure you – well, you may be referencing our traditional competition, now part of Intel. And certainly, we keep an eye on that and everything.

But, really because of the breadth of what we're doing now, we compete against sort of non-traditional alternatives as well, right. Be that earlier you're in CPUs, GPUs in some areas, ASICs, I think the ACAP architecture is really a phenomenal leap and I feel very good about what will happen in our competitive position. We've had the 3P, you don't really hear us talking about it, because as far as I'm concerned, that's almost like table steaks now. And obviously, the R&D team is not going to want to easily feed that, but it's not just about getting to a next node and doing the next evolutionary thing. Now we're looking at a, quite a step forward.

So I feel really good about our competitive position, but I think it's much broader than maybe the traditional competition, which we've heard very little of and I haven't heard anything like the kind of architectural innovation we are doing with it, so. Philip Lee - Citigroup Global Markets, Inc.: Got it. Thanks for the color. Lorenzo A. Flores - Xilinx, Inc.: Okay, I just want to clarify in the statement I made.

When I was reading my remarks, I talked about our fourth quarter operating expenses. I said we had $286 million of GAAP operating expenses, and then I misspoke when I brought in the concept of our executive transition costs. I should have said $286 million less $33 million of executive transition cost landing at $253 million, which is how we base the 33% operating margin non-GAAP number for the quarter. Just want to get that on the record. Rick Muscha - Xilinx, Inc.: Okay.

Thanks for joining us today. We'll have a playback of this call beginning

at 5:00 PM Pacific Time, 8:00 PM Eastern Time today. For a copy of our earnings release, please visit our Investor Relations website. Our next earnings release date for the first quarter of fiscal year 2019 will be Wednesday, July 25, after the market close. We'll be hosting an Analyst Meeting in New York City on May 22.

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