Xilinx, Inc. (XLNX) Q3 2018 Earnings Conference Call Transcript

Xilinx, Inc. (XLNX)
Q3 2018 Earnings Conference Call
Jan. 24, 2018, 5:00 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good afternoon. My name is Victoria and I will be your conference operator. I would like to welcome everyone to the Xilinx Third Quarter Fiscal Year 2018 Earnings Release Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. If you would like to ask a question at this time, press "*" and "1" on your telephone keypad. If you would like to withdraw your question, press the "#" key. 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 -- Senior Director -- Investor Relations

Thank you and good afternoon. With me are Moshe Gavrielov, Chief Executive Officer, Lorenzo Flores, Chief Financial Officer, and Victor Peng, Chief Operating Officer. We will provide a financial and business review of the December 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 documents the company files with the SEC, including our 10Ks, 10Qs, and 8Ks. 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 is being webcast live. It can be accessed from our Xilinx Investor Relations website. Let me now turn the call over to Moshe.

Moshe Gavrielov -- President and Chief Executive Officer

Thank you, Rick. Welcome, everyone, and thank you for joining what is my 41st and final Xilinx earnings call. It's been a great privilege to have led Xilinx over the past ten years. Needless to say, I'm extremely proud of what the Xilinx team has accomplished. On the business side, we're unquestionably on a very consistent growth trajectory, having just delivered our ninth straight revenue growth quarter while attaining our 30% operating margin target. In addition, we're quite confident that we'll make it ten in a row, potentially exceed our revenue target of $2.5 billion this fiscal year.

On the operations and technology front, we have delivered three consecutive generations of technology leadership by developing both world-class silicon and highly optimized software capability. Business facilitated the strategic transition from our FPGA roads with a premier, all-programmable company, thereby enabling Xilinx to participate in a much broader and deeper way in our customers' multi-market solution and expand beyond our traditional markets.

I'm delighted to have this opportunity to hand over the Chief Executive Officer reins at Xilinx to my long-term colleague, Victor Peng. As a huge contributor to our success over the past ten years, I am very confident in the future success of Xilinx under his stewardship. At this time, I'll turn the call over to Lorenzo.

Lorenzo Flores -- Senior Vice President and Chief Financial Officer

Thank you, Moshe. It's been a pleasure to work with you for the almost ten years I've been here, particularly to serve with you as the Chief Financial Officer for the past almost two years. I wish you well.

Moshe Gavrielov -- President and Chief Executive Officer

That's not in the script.

Lorenzo Flores -- Senior Vice President and Chief Financial Officer

It's not but I'm ad-libbing. I'll go back to the script now. But we do wish you well.

Sales in the December quarter increased for the ninth consecutive quarter to a record of $631 million, up to 2% sequentially and up 8% on a year-over-year basis. Sales for the nine months of the fiscal year to date were up 7% versus the same period of the prior year. Revenue growth in the quarter was driven by our Advanced Products, which grew 10% sequentially and 30% year-over-year to a new record. Gross margin was 71.1%, higher than our guidance, as our product mix was more favorable than expected. Operating expense was $259 million, in line with our forecast. We continue to execute to the plan we outlined at our Analyst's Day last May. Operating income for the quarter increased 2.4% sequentially to $189.7 million. Our operating margin hit 30.1%, one quarter ahead of schedule.

As a result of the enactment of the Tax Cut and Jobs Act of 2017, we incurred a tax expense of $183.2 million, or a rate of 94% in the December quarter. This one-time tax impact was related to the transition tax on accumulated foreign earnings and the remeasurement of certain tax assets and liabilities, somewhat offset by the reduction in the U.S. statutory rate. Our net income for Q3 was $11.9 million or $0.05 per share. For comparison purposes, if our tax rate had been in the middle of our forecasted range, our EPS would have been $0.67 per share.

Now on to the balance sheet and cash flows. We ended the quarter with $3.6 billion in gross cash and $1.9 billion net cash after our debt. Operating cash flow was $185 million. We returned $162 million to shareholders during the quarter in the form of $89 million in dividends and the repurchase of approximately 1 million shares for $73 million, an average price of $71.34 per share. During the first nine months of the fiscal year, we have returned nearly 100% of our operating cash flow back to shareholders in the form of dividends and share repurchases. As we have said in the past, we continue to invest in our business to capitalize on our leadership position and will continue to return capital to our shareholders. We are still executing on our share repurchase program and have $372 million remaining on that authorization. We expect ending share count in the March quarter to be in the range of 255 million to 260 million diluted shares.

For guidance, in the March quarter we are expecting sales to be between $635 million and $665 million. Our backlog is up strongly as we begin the quarter and we continue to expect growth in our Advanced Products. With regards to end market, we expect Communications and Data Center to be up. Industrial and A&D will be approximately flat. Broadcast, Consumer, and Automotive is also expected to grow. While Auto and Broadcast are growing, a significant amount of growth in this set of end markets will be from Consumer, which bears some explanation. We have treated cryptocurrency as it has emerged as a consumer business. This business has become larger and more durable, driving growth in fiscal Q4, though it is still potentially volatile. Victor will also talk more about this.

Our gross margin for the quarter will be approximately 69% to 71%. We expect core operating expense to decrease to approximately $255 million. However, in this quarter we will recognize one-time expenses of approximately $30 million related primarily to our Chief Executive Officer transition. Finally, our tax rate is expected to be between 0% and 5% for this quarter, as impacted by the tax reform act. Our financial performance year to date and our guidance for the fourth quarter indicate to us that we are on track to meet or exceed our annual guidance on all operating parameters. Let me now turn the call over to Victor.

Victor Peng -- Chief Operating Officer

Thank you, Lorenzo. And my sincere thanks to you, Moshe. I'm going to stay on script because while this is your 41st call, this is my first. And I probably shouldn't blow that. So good afternoon, everyone. I'm truly honored and extremely excited to be speaking with you on my first Xilinx quarterly earnings call. And I'm particularly fortunate to be assuming leadership, not only with Moshe taking this company to such a great position, but in truly a very dynamic time in our industry. By focusing on delivering unique value in emerging areas as well as our traditional markets, we will build on this revenue growth we've established and create the next wave of shareholder value.

In an era where the pace of Moore's Law has slowed, Xilinx is in a unique and unprecedented position of strength. Enormous amounts of data being created, stored, and processed presents tremendous opportunities for Xilinx. Applications like machine learning, compute and storage acceleration, autonomous driving, and 5G all promise to make an enormous impact on people's lives. Tomorrow's compute intensive applications require optimized platforms that are capable of delivering both acceleration and adaptability. Xilinx possesses the right technologies and capabilities to take a leadership position. And I'm delighted to have this opportunity to help the company maximize its potential.

Now I'd like to add my comments about both the December quarter and the outlook for the March quarter. I'm very pleased with our consistent execution as demonstrated in our December quarter's results. Revenue grew, as Moshe said, for the ninth consecutive quarter to the record $631 million. Additionally, our operating margin exceeded 30% one quarter ahead of our plan, driven by better than expected gross margin. Our overall revenue growth was again driven by our Advanced Products. Revenue from these products increased 10% sequentially and 30% year-over-year. This category now represents 56% of our overall revenue, significantly up from 52% last quarter and 47% a year ago.

Both our industry leading 20-nm and 60-nm technology nodes set significant sales records. With our 60-nm portfolio, we are now delivering 43 unique products to approximately 1,160 customers. Revenues from our Zynq SoC platform, an integral element of our multi-market expansion efforts, increased nearly 40% from a year ago quarter and is expected to grow again in the March quarter. This platform has established sales traction in all of our end markets with significant success in the automotive, industrial, wireless, and consumer markets. As Lorenzo noted, our product is finding some success in cryptocurrency mining system. We're finding that our products and customer support capabilities really fit the need of this emerging market and we do anticipate future growth while being cautious about the volatility of this segment.

With regards to end markets, the Industrial, Aerospace and Defense markets set another quarterly record with sales of $297 million, an increase of 7% sequentially and 23% from the year ago quarter. This growth was driven by both the Semiconductor Test and Emulation Applications. Our unrivaled technology leadership has been a very significant driver for this record setting revenue performance. Our strong momentum in the Data Center continues unabated. Market lead Alibaba recently announced plans for two generations of FPGA as a service, F2 and F3 using Xilinx's Ultrascale + FPGAs. And beyond the public cloud, we're seeing strong activity in workload, specific compute acceleration, storage, and smart nets. These Data Center opportunities continue to be one of our key medium-to-long-term market expansion opportunities.

As we look forward to the March quarter, our guidance of $635 million to $665 million is again expected to be driven by the continued growth of our Advanced Products portfolio. If we achieve this guidance, we will establish another sales record by Xilinx. Our overall revenue performance through the three quarters of the year and our Q4 guidance gives us confidence that we will exceed our $2.5 billion plan for Fiscal 2018. And as we mentioned, we already reached our goal of 30% plus operating margin a quarter early.

Now I'll turn it back over to the operator for Q&A.

Questions and Answers:

Operator

The floor is now open for questions. If you do have a question, please press "*" and "1" on your telephone keypad. Once again, that is "*" followed by "1" on your telephone keypad. Please limit your questions to one to ensure that management has adequate time to speak to everyone.

Your first question comes from the line of Ambrish Srivastava with BMO.

Ambrish Srivastava -- BMO Capital Markets -- Analyst

Hi, thank you very much and I'm going to ad-lib here. Moshe, thanks for being a gentleman all these years. We have not always seen eye to eye but you always treated us very fairly. So good luck on the next innings.

Question on the op margin and also kudos for hitting that target. And my question is for you, Victor. How should we think about sustainability of that? Given the increase in the next node, and that's been the case forever, but it seems like a step jump in that. And also you're spending more on the FPGA as a service model. So just help us understand how should investors have confidence that this has been a bogey that has been elusive on a consistent basis for Xilinx so how should we think about that? Thank you.

Victor Peng -- Chief Operating Officer

Yeah. So from a growth margin perspective, that has a lot of factors but a big factor is NIC. So in terms of the way the segments came out and we had really strong growth in segments for which we generally have very good value. Of course, it's more complicated than that. There's a lot of things we're doing for controlling the cogs and so forth. So I would say that we absolutely can -- excuse me, I was referring to gross margin rather than in terms of the operating margin. Obviously that falls through but -- so at that level, in terms of the operating margin, I think we've been very careful about investing where we see bigger returns and also being mindful of where we are on the gross margin line. So I think that we're going to be balancing those things. Right? We generally give a range of the upper 60s up into the 70s and I think if we look at how return we would get by investing further, we'll do that aggressively. And other places, we absolutely want to give return to the shareholders. So.

Lorenzo Flores -- Senior Vice President and Chief Financial Officer

So, Ambrish, you know, I think maybe I'm going to pre-empt some other questions on this. But we're -- I guess outside of tax, which I'll help you guys out a little bit on for the future, we're going to stick with our traditional cadence of providing specific financial guidance initially in our Q4 earnings call and then more in detail at our Analyst's Day. So. But I think kind of the fundamental principles that Victor laid out will be what we apply. Right? Which is we're investing in the company and we're continuing to manage it to return the most we can to the shareholders.

Ambrish Srivastava -- BMO Capital Markets -- Analyst

And I think the piece that you have given us is the scale. And I think that's what I was hoping to hear from you is that you're about to reach your inflection point on the FPGA as a service model, which will help fund that.

Victor Peng -- Chief Operating Officer

Yeah, sorry. I'm sorry. I didn't mention -- I didn't address that piece of the question. Look, I think we've been pretty consistent in saying FPGA as a service is a more mid-term to longer-term opportunity. From a running perspective, that is not yet in a very material state. I'd also point out that FPGA as a service is only one segment of the computing acceleration, which is only one segment of our opportunity in the Data Center. I think we've been pretty consistent in saying that we have many opportunities, not only on the compute side but also in storage and in networking side. So I think that's a little less connected to your question regarding sustainability of the operating margin. I think on the operating margin side, again, you're seeing that we have achieved our goal ahead of plan and we do think there's legs here. On the other hand, if we feel like the right thing to do is invest to ensure strong growth, we'll do that. But we'll always be mindful of returning good value to the shareholders.

Ambrish Srivastava -- BMO Capital Markets -- Analyst

Okay. Thank you. Good luck.

Operator

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

Blayne Curtis -- Barclays Capital, Inc. -- Analyst

Hey, guys, thanks for taking my question. And Moshe, best wishes on your next venture here. I was wondering if you could just talk about the consumer bucket. Obviously this cryptocurrency has been a big driver for a lot. Maybe just talk about December and then outlook into March, if you can kind of frame how big that's getting and how much of a driver is it for that segment into March?

Victor Peng -- Chief Operating Officer

Blayne, I'm glad you asked that because we're flagging it because in the past this has been really not material enough to even mention. Because of the fact that it's grown -- and we're talking about like in the tens, low tens of millions, we wanted to flag this. However, this is not like a GPU sized kind of exposure. Right. And again, you heard both Lorenzo and I say that there's a lot of volatility here. So I wouldn't -- we're mentioning it because now it's not something that's totally negligible. But just to give you the right order of magnitude, it is not something where we suggest you try a new model. It's very volatile and it's a very new and emerging thing.

Blayne Curtis -- Barclays Capital, Inc. -- Analyst

Okay. Thanks.

Operator

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

C.J. Muse -- Evercore Group LLC -- Analyst

Yeah, good afternoon. Thank you for taking my question. I guess first off, sorry, Moshe, congrats. Pleasure working with you. And Victor, look forward to working with you and congrats to you as well.

I guess for my question, maybe kind of a follow-up to the first one, as you think about tax reform and access to all that cash, how does that change your thinking, if at all, in terms of R&D investments as you project ahead into beyond Fiscal '18?

Lorenzo Flores -- Senior Vice President and Chief Financial Officer

I don't think there's a first order impact from tax reform on our operating model. It comes mostly into play for us in terms of capital allocation. So I think regardless of tax reform, and regardless of the quarter-to-quarter specifics, we will maintain very high profitability and very high cash flow generation. So what we see as the primary benefit of tax reform is freer use of cash on a global basis. We're right now understanding some of the longer term impacts of it because there are some second order or more detailed aspects of tax reform that will impact cash payments. So we're modeling that as best we can out into the future and we'll use that to influence what we do on capital allocation. That's still in the works and, again, we'll probably talk more in detail about that at our Analyst's Day.

C.J. Muse -- Evercore Group LLC -- Analyst

I mean, do you have a sense of your GAAP and/or cash tax rates? Or that's something for the Analyst's Day?

Lorenzo Flores -- Senior Vice President and Chief Financial Officer

Sure, sure. Like I said earlier, I think it's unfair to you guys to say, "Okay, one quarter they had 93%, the next quarter it's going to be 0% to 5%." And not leave you with any guidance past that. We actually -- and I'll wrap all the considered caveats around this. But as we understand it right now, our forward tax rate should be between 10% and 15%. So pretty much like we had experienced in the recent past. So that's our best guidance right now. But it's obviously not without some caution. There's potential for regulatory changes as more technical guidance comes out on different aspects of that. But right now, that's the best we can get.

C.J. Muse -- Evercore Group LLC -- Analyst

Thank you.

Operator

Your next question comes from the line of John Pitzer with Credit Suisse.

John Pitzer -- Credit Suisse Securities -- Analyst

Yeah, good afternoon, guys. Congratulations. Thanks for letting me ask a question. And Moshe, I'll echo the sentiment. Thanks for all the help, helping to understand Xilinx through the years. Greatly appreciated.

I guess my question is sort of a follow-up on the margin side and I want to focus really on the gross margin side. This is only the second time in corporate history that I can see in our model that you've had gross margins above 71%. And Victor, I understand the importance of mix. So I guess Part 1 of the question is can you help me understand what happened in the quarter from a mix perspective to make things this rich. And I guess more importantly, just given that you're broadening your lead against the competition and broadening the number of applications that you can address, why shouldn't we think that there's a continued structural upward bias on gross margins over time? The caveat being no one should have to apologize for 71% gross margin.

Lorenzo Flores -- Senior Vice President and Chief Financial Officer

Thanks for that.

Victor Peng -- Chief Operating Officer

Yeah, thanks for that. Yeah. You know, as I said, I talked about mix and that was really an oversimplification. Look, on the one hand, we are creating a lot of value. Right? I mean, our products, our leadership, not only because we've executed well and delivered what we said, but we've done innovations. The most recent one, for instance, the RFSoC, where we integrated RF class data convertors monolithically with a 60-nm digital process. That's saving the customer power, costs, size, weight, all these things. In some of the other areas, we have the largest capacity by factors. So part of this is you've got to be creating value. Right? And then if you do that and, on top of it, you execute and you get and so forth, then you're going to get value. There's also just, of course, the natural fact, the mix pieces add -- the different segments have natural different levels of margin, right?

So put cryptocurrency aside. We all know, of course, Consumer, to the extent that we play, there's more price challenge, there's more margin leanness. The other places that we play, in Aerospace and Defense, for instance, and so forth, and in general, if you are delivering value, you can get the value. So on the one hand I would agree with you, is that I think with our innovations and what we're doing, that we are getting value and we're giving value to the customers. But the variability does become where you have certain markets, if they pick up very strongly and they're naturally in that market. I have more ASP competitors, then that's going to change things. But we certainly think that, with leadership and the products and the continued innovation, that, in general, we can and will get good, solid gross margins. But you'll always have that variability and then, of course, you know --

Lorenzo Flores -- Senior Vice President and Chief Financial Officer

No, the gross margins are -- just to remind you all. John, I know we've had this conversation before. It's not reflective only of a one quarter shift in mix. There's a decade now long legacy of focus on improving the gross margin of the company. And our approach does provide us with a solid basis for, just as Victor said, consistently strong expectations on gross margin. But we're in very competitive markets in a lot of places and in markets where, by the nature of those markets, you're under consistent cost pressure. So, yes, while we have a firm basis, saying we're going to keep growing it is probably a little aggressive.

John Pitzer -- Credit Suisse Securities -- Analyst

Lorenzo, what specifically this quarter about mix was such a tailwind?

Lorenzo Flores -- Senior Vice President and Chief Financial Officer

So we had actually the benefit from -- Victor and Moshe both mentioned our Advanced Products growth, particularly our newer products, which happen to be the highest value products we can provide. Those provided an uplift. And we also had good business in general in the Industrial and Aerospace and Defense, Test Measurement, and Emulation end markets, which generally provide an uplift for our margin structure.

John Pitzer -- Credit Suisse Securities -- Analyst

Thanks a lot. Very helpful.

Operator

Your next question comes from the line of David Wong with Wells Fargo.

David Wong -- Wells Fargo Securities LLC -- Analyst

Thanks very much. Reading off my carefully crafted question script, can you fill us in what percent of overall revenues came from Automotive and how much Automotive was up year-over-year?

Lorenzo Flores -- Senior Vice President and Chief Financial Officer

So Auto was up year-over-year on the order of a little more than 20% but I think that's a little bit of a measurement anomaly. We had somewhat of a low point last year this quarter in Auto. And we are seeing it still in around the 7%-ish of overall sales. Most of that business, again, is ADAS related and most of the growth is ADAS and Zynq for us going forward.

David Wong -- Wells Fargo Securities LLC -- Analyst

Great. Thanks so much.

Operator

Your next question comes from the line of John Vinh with KeyBanc Capital Markets.

John Vinh -- KeyBanc Capital Markets, Inc. -- Analyst

Hi, thanks for taking my question. Good luck to you, Moshe, and, Victor, congrats on your new role. My question is around Comms. Last night, you heard TI kind of call it out as a source of area of weakness that they're seeing. It looks like Comms for you came in maybe slightly below what you were expecting but you did guide for Comms to be up in March. I'm just wondering if you could give us some color in terms of what sort of demand trends you're seeing there. And also if you could comment on what you're seeing between Wireless and Wireline, that would be great.

Lorenzo Flores -- Senior Vice President and Chief Financial Officer

Sure. So Wireless is actually up some. I think we mentioned several times that we're in virtually all of the pre-5G prototyping, so we saw some growth there. We also saw some strength in 4G deployments in India. Wired slowed down some, mainly due to some deployment of some products. But when we look at the current quarter, we see that Wired will be back up and Wireless will probably be about flat-ish.

John Vinh -- KeyBanc Capital Markets, Inc. -- Analyst

Got it. Thank you.

Lorenzo Flores -- Senior Vice President and Chief Financial Officer

And not inconsistent with what we've been saying. Wireless will bounce around, around this level, until we see the 5G inflection point.

John Vinh -- KeyBanc Capital Markets, Inc. -- Analyst

Great. Thanks. And I had a follow-up question on M&A. It seemed like M&A activity is starting to pick up. And similarly with the tax reform and the ability to repatriate cash, it seems like activity in the sector could pick up. One, does that give you an opportunity to be a little bit more proactive on the M&A front? And can you also remind us in terms of how much offshore cash you will have the opportunity to repatriate?

Lorenzo Flores -- Senior Vice President and Chief Financial Officer

So let me take the more specific, the cash question first. And then I think Victor can elaborate on the market situation for M&A. The easiest way to think about it right now is, after we pay the transition tax, which for the most part is a book number because the structure is deferred over eight years, pretty much our cash balance is free to move about the world. So that's part of this assessment that we're doing overall. So gross cash at $3.6 billion, net cash of $1.9 billion. We don't force the limitations on applying that cash anywhere in the world or seeing any sort of tax penalty for doing it. We will have ongoing tax, which on a cash basis will be higher than we've experienced in the past. But there won't be restrictions on cash utilization. Or maybe better put, economic disincentive to use it anywhere. So that's a good news part of tax reform for us.

Victor Peng -- Chief Operating Officer

So on the M&A side, I view it as our focus is, "What is our strategic objectives and goals?" And M&A could be a tool to sort of further that. So we look at it that way and we always consider that along with other many options. You know, ultimately, of course, you want to maximize shareholder value. That's the, from a financial perspective, the main goal. But I would say that the focus is to think about what all our options are in the strategic context and what we're trying to accomplish. And if M&A's the thing, then that would be considered along with other options. Clearly on this call, this isn't the time to talk about that kind of vision of things. There will be a time later in the quarter where we'll have the opportunity to talk a little bit more about direction and vision.

Operator

Your next question comes from the line of Ross Seymore with Deutsche Bank.

Ross Seymore -- Deutsche Bank Securities, Inc. -- Analyst

Hi, guys, thanks for letting me ask a question. I also want to echo the congratulations to Moshe and Victor. Just wanted to follow up on the end market splits. You guys have done a great job growing for, I think it's nine consecutive quarters on a sequential basis. And the annual guidance ranges you've given have been very helpful and it sounds like you're going to beat those for this fiscal year. But there's some pretty big deltas between what you guided by segment and what you've delivered, with the Comms and Data Center side being well below your guidance but the Industrial and Aerospace and Defense being well above. So I guess with all that being said, what was surprising in those two segments versus what you originally thought? And what's the duration of the new trajectory? Do you think it stays this weak on one side and this strong on the other or is something going to mean revert?

Lorenzo Flores -- Senior Vice President and Chief Financial Officer

So versus where we thought, I think you've gotten the primary points, which are the Industrial and A&D set of end markets, which includes Industrial, true Industrial, Aerospace and Defense, and Test Measurement and Emulation, were a very pleasant surprise with their strength this year. And that's pretty much across the board in those end markets. The Consumer, Automotive, and Broadcast set of end markets is on track, with maybe Automotive not as strong as we initially thought but, as I said earlier, still growing in ADAS applications and still a good platform for us in the future.

Wireless and Wired Communications, Data Center end market that has underperformed, partially because Wired is not -- Wired and Data Center is not as strong collectively as we thought. And then Wireless was bouncy and tough to predict to begin with. But as we go forward, I think the -- without being very specific about the direction, like I said, we'll provide more of that later on this year, the characteristics that are driving Industrial and A&D seem to be sustainable. The Consumer, Automotive, and Broadcast business, as we talked about, we could see some good upside from the -- as we talk about it now, from applications like the cryptocurrency and we look to maintain our position in automotive. Wireless we still think is going to have that same basic characteristic of flat-ish with ups and downs until we see the 5G. And Wired and Data Center, I think we're going to continue to see slow growth.

Victor Peng -- Chief Operating Officer

But it will be up. I'm not going to repeat all that. I do want to add a little just in term of applications. A&D has been strong. That is not a surprise frankly. I think that is something that's been strong and we definitely see that continuing. In Test Measure and Emulation, I think we can expect to be strong, maybe it was a little stronger than we expected, but I wouldn't say it's a surprise. I think some of the other comments that Lorenzo shared, I would agree. But, I mean, overall, I don't want you to think that some of these things we didn't anticipate. It just happens that a lot of the growth fell in that single bucket. Right? If you break it down more, as Lorenzo said, there's good growth in multiple sub-segments.

I would also say, in general, we're talking about by segments, we talked also about the fact, and I mentioned in my remarks, that Zynq is also a very strong platform. And I see that strengthening across multiple markets. So I think there are definitely areas where we've been seeing it and we see that sustained. So.

Ross Seymore -- Deutsche Bank Securities, Inc. -- Analyst

That's helpful color. Thank you.

Operator

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

Tristan Gerra -- Robert W. Baird & Co., Inc. -- Analyst

Thank you. I'll join my peers and congratulate both Moshe on many years of significant achievements and also Victor on your new role. Regarding 5G, is it fair to assume that this ramp is going to be more small cell-based versus bay station based? And so as such, should we view 5G as potentially being more of a higher unit but lower silicon content opportunity? And perhaps if you could refresh us a little bit on when you think the ramp beyond field tests can be more meaningful over time?

Victor Peng -- Chief Operating Officer

Yeah, let me go and answer that last part first. So I think we've been pretty consistent in saying we really see the ramp more in the 2020 time frame. I mean, yes, there are some early things going on now and we've got approximately 90% of those early pre-5G and proof of concepts. And I also refer to a really disruptive product in the RFSoC, but of course that's just getting out now. Now to transition to the first part of your answer. Let me start with RFSoC in that regard. I mean, RFSoC is something that is something that is not just 5G. It's the right technology and really the way to deal with any massive MIMO kind of architecture. So that's a very large TiN arrays and that's the trend that's being moved to across -- in general, not only in wireless infrastructure but other, very adjacent applications. Right? And then in terms of small cell, yes, there's small cell but I think that it's really a range of different types of infrastructure. So I wouldn't say that it's just small cell. So in general, I would say we see a very strong position there but, again, the ramp is more in the 2020 timeframe. And as far as RFSoC, we're seeing great momentum but it's really not meaningful revenue at this point. Right? People are just starting to design with that. That goes into production this calendar year.

Tristan Gerra -- Robert W. Baird & Co., Inc. -- Analyst

Okay, great. And then just a quick follow-up. So it looks like the tens of millions of revenue target that you had for this fiscal year for FaaS potentially gets pushed out a little bit. How should we look at the ramp? Is there a timing at which we see more of an inflection point and any qualification that you may want to put forward for the next year or two for Data Center and this customer?

Victor Peng -- Chief Operating Officer

I'm sorry. When you're referring to the tens of millions being pushed out, could you?

Tristan Gerra -- Robert W. Baird & Co., Inc. -- Analyst

I think that was somewhat of a soft target that Xilinx had put in place regarding this fiscal year in terms of Data Center ramp.

Victor Peng -- Chief Operating Officer

Okay. I see. Yeah. I mean, again, what I would say is that the -- first of all, Data Center. The traditional portion of our Data Center revenue, the kinds of deployments we did in the past, largely in storage but not only in storage, that still is actually the larger part of the revenue over all. I think the revenue that is the emerging part that we referred to, and I think what you were probably really targeting your earlier discussion about FaaS and so forth, I mean, that is in the smaller number that you're talking about. Now it's still in those tens of millions. I don't see this as a push-out. I think we've been pretty much consistent in saying that this is a period where we're building application, we're getting the tools and the infrastructure out there, we're building an ecosystem, and so forth.

Just to put this in perspective, in the Reinvent conference that Amazon had back in 2016, November of 2016, that's when they announced, and they were the first ones to announce, FPGA as a service. They actually announced it but it didn't even start going online until April of 2017. Since that time, we now have five announced FaaS deployments. But again, many of them are just coming on line. In the Reinvent conference Amazon just had this past November, they announced the fact that they have now, instead of just one region, there are three regions which FPGA accelerators are deployed, including the secured U.S. government cloud, and for, I think a total of 11 availability regions.

So I think what I'm trying to suggest here is that it is not at the stage where we're talking about big revenue growth. This is all about building the applications, the infrastructure, getting the deployments. And we're seeing very good momentum on that perspective. I don't see that there's a push-out per se, I think that it's just, again, building the foundation and getting the applications out and getting these engagements going.

Tristan Gerra -- Robert W. Baird & Co., Inc. -- Analyst

Great. That's very useful. Yeah, very useful. Thank you very much.

Operator

Your next question comes from the line of William Stein with SunTrust.

William Stein -- SunTrust Robinson Humphrey, Inc. -- Analyst

Great. Thanks for taking my questions. Congrats on the good results and outlook. And again my congrats to Moshe as well. If you can help us understand the commentary on crypto, it would be helpful. Specifically you're saying you think it's more durable or maybe that translates to sustainable. Is there something about your position in that market or demand trends that you think reflect something that indicates that sustainability in that marketplace? Thank you.

Victor Peng -- Chief Operating Officer

Yeah, well, I think obviously the cryptocurrencies are extremely volatile and so I think, one, in some situations, what happens is that things change so much that it's hard in that sense to predict. In terms of the sustainability though, we do see, as we said, we do see that we've had revenue in the low tens of millions. We see that kind of level of revenue continuing. And we also are providing support for these customers. Okay? It's no secret that there's so much involved here that people are doing custom ASICs for this and they're also using GPUs. Now, the reason why we do see some fip here is because it's a very dynamic situation, too, with -- Bitcoin gets a lot of press, but really there's multiple different currencies and there's a lot of things happening. So with that kind of change, the flexibility we have that has that value. Right? But we're very cautious here because of the volatility of it and we don't want you to do over-read in what we're saying. That's why in the TP space, they've had much bigger exposure but nonetheless it's gotten to the point where we don't want to just have it not at least raised

Lorenzo Flores -- Senior Vice President and Chief Financial Officer

Yeah. No, I think the durability point comes from when it first -- when we first saw it, it was a very small business. And it grew significantly but we didn't have any line of sight to any future business path, what was currently in the book. We now have a better line of sight by working closely with some of these customers and what their plans are and the future potential of the business. That's really what I was going after when I said that because it's something we understand a little bit better but, again, as we keep saying, we're cautious about the macro factors that drive the core demand for these products.

William Stein -- SunTrust Robinson Humphrey, Inc. -- Analyst

That helps. Thank you.

Operator

Your next question comes from the line of Chris Caso with Raymond James.

Chris Caso -- Raymond James -- Analyst

Yes, thank you. The question about the revenue turns percentage that seems to have been steadily dropping, is that a function of where product lead times are now? If you could explain that relationship and basically what you're seeing from both a turns perspective, how that gives you visibility into the business and where you're seeing lead time.

Lorenzo Flores -- Senior Vice President and Chief Financial Officer

No, we don't really have any lead time issues. And actually that's one of the things our customers have appreciated about us, which is our ability to support them. I do think it's more a function of us continuing to drive the business and to get the orders on the books as soon as we can. It does help us plan and it does help us from some downside variability, if it ever occurs. This is just the way we're trying to drive the business. Not to say that it will always be this way, but we're making a deliberate effort to get the orders on the books.

Chris Caso-- Raymond James -- Analyst

Thank you.

Operator

Your next question comes from the line of Chris Danely with Citigroup.

Chris Danely -- Citigroup -- Analyst

Hey. Thanks, guys. And, yeah, Moshe, thanks for everything over the years. Mazel Tov. Chamashevi. Anyway. That's Hebrew for those of you that don't know out there. I don't know if you guys -- I don't know if you guys went into the relative growth rates you expect in your three main end markets for the calendar year, if you could just run through those real quick.

Lorenzo Flores -- Senior Vice President and Chief Financial Officer

I'm sorry. You said for the calendar year or for the last quarter?

Chris Danely -- Citigroup -- Analyst

For this calendar year, what's your relative growth rate expectations between Comm, Industrial, and Broadcast?

Victor Peng -- Chief Operating Officer

I don't think that on this call I want to give the guidance for the quarter -- I mean for the calendar year. But in terms of where we see now in the quarter that we're in, the Industrial -- Aerospace, Industrial, A&D, that we definitely see will be a very strong quarter -- I mean overall, that basket. I think the AVB, Consumer, and Auto will be holding, slightly up, I believe. Right?

Lorenzo Flores -- Senior Vice President and Chief Financial Officer

Well, so I think -- yeah, Chris, so for the year, I mean, the calendar year is three-quarters of our next fiscal year. And like I said before, we'll do that guidance first at the end of this quarter and then more completely at Analyst's Day. But for this current quarter, the fourth quarter with respect to the third quarter, was what I had referenced in my guidance piece earlier.

Chris Danely -- Citigroup -- Analyst

Sorry. I was talking about the fiscal year. I'm sorry. I was referring to this fiscal year, of which sub-segments was gonna show pretty strong growth.

Lorenzo Flores -- Senior Vice President and Chief Financial Officer

So I got -- I think we were both a little bit confused about the time horizon in your question. Sorry about that. but for this quarter, the Industrial, Aerospace and Defense end market set will be relatively flat-ish as the Industrial and Aerospace and Defense segment growth offsets a decline from actually a relatively -- record setting, it's not relatively. A record setting performance on Test Measurement and Emulation. The Communications and Data Center end markets will be up slightly and the Consumer, Automotive, and Broadcast business will be up and that's where, right now, we've bucketed the cryptocurrency business and that's why we spent a little bit more time explaining that.

Victor Peng -- Chief Operating Officer

And that's for the quarter?

Lorenzo Flores -- Senior Vice President and Chief Financial Officer

For the quarter, right.

Victor Peng -- Chief Operating Officer

Sorry. I thought you were saying when we complete the fiscal year, how it would look.

Chris Danely -- Citigroup -- Analyst

Yeah, I'll wait for the long-term guidance for the Analyst's Day.

Victor Peng -- Chief Operating Officer

Okay, yeah, great. Thanks.

Chris Danely -- Citigroup -- Analyst

Great. Thanks, guys.

Operator

Your next question comes from the line of Christopher Rolland with Susquehanna International.

Christopher Rolland -- Susquehanna International -- Analyst

Hey, guys, I also want to echo my congrats on the great quarter and congrats, Victor, on the promotion, and congrats, Moshe, on a great career. So I just, Victor, wanted clarification first. So you said low tens of millions from crypto. Was that per quarter or for the full year? And then I assume that that's most heavily weighted for this last quarter here. And then also the 30% growth in Broadcast, Consumer, and Auto. Great job there and I know Dave already asked about Auto growth here. But what was Consumer growth year-over-year and Broadcast growth? Thanks.

Victor Peng -- Chief Operating Officer

So, I guess, in general, in terms of the cryptocurrency, like we said, that kind of came from a very low number to in that order of tens pretty quickly. So when you sort of said was that on a quarterly basis, actually that would be for the whole year but it kind of came up from, a year ago, virtually zero. So, yeah, so the answer to the first part is yes. It was stronger in the recent quarter but for the year it would still be in that order of magnitude.

Lorenzo Flores -- Senior Vice President and Chief Financial Officer

So the other aspects of the business, the AVB end markets are on the order of 10% up and the Consumer business is up substantially more. But I think again there's some data anomalies that you wouldn't want to -- you wouldn't want to use that as a predictor of the future just because of the way that business had bounced around historically.

Victor Peng -- Chief Operating Officer

Yeah, again, as you know, Consumer is a very, in general, opportunistic one for us. That isn't -- we definitely, when we see certain opportunities, go after it. On the other hand, that doesn't have the kind of emphasis that we have in some of the other markets. And, again, we flagged the crypto because that became from, quickly, essentially zero to something that we wanted to flag.

Christopher Rolland -- Susquehanna International -- Analyst

Yeah, I certainly understand you don't want to leave anything on the table. Thanks, guys.

Victor Peng -- Chief Operating Officer

Yeah, we won't do that.

Operator

You have a follow-up question from John Pitzer with Credit Suisse.

John Pitzer -- Credit Suisse Securities -- Analyst

Yeah, guys, thanks for letting me ask the follow-up. Just quickly on the balance sheet. Inventories were up a little bit more than I would have thought and so were receivables. And so, Lorenzo, I know you talked about not having any availability issues. Is this just the new norm for inventory? What should we expect going into the March quarter or how should we think about that? Thank you.

Lorenzo A. Flores -- Senior Vice President and Chief Financial Officer

Yeah, so in general, you will see our inventory grow in anticipation of the business. We've had -- I think there was one quarter in the past we actually had a higher dollar value of inventory. That was for a specific business area. I think that was when we were getting ready to support Wireless ramp in the last generation. Again, I think that was the case. But we see just, in general, broader end market strength, particularly in our Advanced Products and that's where we're focusing our inventory builds. So I think the inventory number is quite consistent with what you'll see in the business. It should grow as the business grows. But in periods it will drain down a little bit and in others, it will build up a little bit, just depending on what we're actually seeing in the market. On AR, this has been a story that I've told a couple of time. It is relatively high and it is, again, driven by how consumers make shipments during the quarter and payment patterns. I will reassure you all we have no collectability issues on the AR. So it's just high quality and it's purely a timing thing.

John Pitzer -- Credit Suisse Securities -- Analyst

Perfect. Thanks, guys.

Operator

Your next question comes from the line of Joe Moore with Morgan Stanley.

Vinayak Rao -- Morgan Stanley -- Analyst

Hi. This is Vinayak Rao calling in for Joe. I wanted to follow up on your ADAS business. Now that's one space where you have seen good traction for using product. So when you look at your customer design pipeline, just discuss how have the end applications for ADAS evolved over time and what are the applications you're most excited about going forward?

Victor Peng -- Chief Operating Officer

ADAS, again, has been, as I mentioned for Zynq, Automotive is one of the areas that we have significant strength. For the most part, this is all 28-nm by the way, right. And of course, the ADAS requirements in the market keep going up. They keep raising the safety standard so there's already been quite a bit of activity and design-ins for the next generation ADAS. As everybody knows, there's also a lot of development and excitement around autonomous driving. And these things are evolving from advanced driver assist systems toward the autonomous driving. So we have a natural set of relationships, design activities, and, in fact, some winds, frankly, that move us along that whole continuum of the earlier advanced driver assist systems to more sophisticated ones to the early level of autonomous driving.

So, yes, I think that we're definitely participating in that entire evolution. Because of our flexibility, we are participating in all the major sub-portions of the architecture, meaning like we have engagements where we're in the central unit, we have engagements where we're out by some of the sensors, aggregation points, and so forth. So, yeah, we are quite well-engaged there and think that's one of the definite areas where Zynq has gotten very good traction. First generation and then our 16-nm MPSoC as well.

Vinayak Rao -- Morgan Stanley -- Analyst

Got it. Very helpful. Thank you.

Operator

You have another follow-up question from Blayne Curtis with Barclays.

Blayne Curtis -- Barclays Capital, Inc. -- Analyst

Hey, guys, thanks for letting me ask another. I just want to follow up on the March guidance for Consumer. Given you said your Comm bucket would be up slightly, then that bucket, it seems like, should be up double digits. And obviously we talked about cryptocurrency. I'm just trying to understand how strong Automotive is because that business has had kind of an unpredictable path. Typically it's seasonally strong but it sometimes is up larger. If you could just look at that sequential growth into March and maybe kind of get any color between the segments there.

Lorenzo A. Flores -- Senior Vice President and Chief Financial Officer

Yeah, that set of end markets on a percentage basis, the Consumer aspect will grow the most substantial, as you just pointed out. Both AVB and Auto will grow in the low single digits.

Blayne Curtis -- Barclays Capital, Inc. -- Analyst

Very helpful. Thanks.

Rick Muscha -- Senior Director -- Investor Relations

Victoria, we can take one more question.

Operator

Certainly. Your last question will come from the line of Srini Pajjuri with Macquarie Securities.

Srini Pajjuri -- Macquarie Securities -- Analyst

Thank you for squeezing me in. Moshe, let me echo my congrats and again thanks for all your help over the years. Just a quick question. I know you guys don't make CPUs but you do sit next to a lot of them. Just curious if the recent security issues with Meltdown inspector, if you're seeing any impact one way or the other, directly or indirectly, in the near term and do you expect any impact from those issues?

Victor Peng -- Chief Operating Officer

Yeah, I know that's quite a lively topic. And, of course, we led the industry in integrating an RMSoC in all programmable FPGAs. And as you know, we licensed those cores from ARM. So I will say that we absolutely know that there is no known susceptibilities of the Xilinx specific implementations of the ARM cores that we licensed from ARM. And according to their information -- we work very closely with ARM. We don't believe there's any susceptibility to the Meltdown aspect of it. Right? Regarding Spectre, there's no known susceptibility in terms of the 16-nm Zynq MPSoC. And in terms of the first generation Zynq SoC, we used there the ARM Cortex A9, which has the possibility of having some of that, however I would point out that most of our customers do enclosed, embedded systems. Right? And if that's the case, then it's highly unlikely that there would be exposure to that.

In addition, if the customer does have something get user, kind of code exposure, if they use authentication and security features that are there, then that exposure is also the same thing, highly unlikely. We haven't heard anything from customers but, of course, you monitor that very closely and we're working with ARM very closely on any further news or mitigation. Just to round out the bases by the way, we've had our proprietary MicroBlaze, self-embedded processor. We know that there is no vulnerability there. That architecture is very simplistic so there's no vulnerability in either the Meltdown or the Spectre. So does that --

Srini Pajjuri -- Macquarie Securities -- Analyst

Yeah, that's very helpful. Yeah. That's it.

Rick Muscha -- Senior Director -- Investor Relations

Great. Well, 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, please visit our Investor Relations website. Our next earnings release date for the fourth quarter fiscal year 2018 will be Wednesday, April 25, after the market close. We'll be attending the following conferences this quarter: the Goldman Sachs Internet and Technology Conference in San Francisco on February 13th; the Morgan Stanley TMT Conference also in San Francisco on February 27th; and the BofA ML APAC Conference in Taiwan on March 15th. Also we will be hosting an analysts meeting in New York City on May 22. Please do save the date and we look forward to seeing you there. And we'll have many more details to follow. This completes our call. Thank you very much for your participation.

Operator

This concludes today's conference call. You may now disconnect. Thank you for your participation.

Duration: 60 minutes

Call participants:

Rich Muscha -- Senior Director, Investor Relations

Moshe Gavrielov -- President and Chief Executive Officer

Lorenzo A. Flores -- Senior Vice President and Chief Financial Officer

Victor Peng -- Chief Operating Officer

Ambrish Srivastava -- BMO Capital Markets -- Analyst

Blayne Curtis -- Barclays Capital, Inc. -- Analyst

C.J. Muse -- Evercore Group LLC -- Analyst

John Pitzer -- Credit Suisse Securities -- Analyst

David Wong -- Wells Fargo Securities LLC -- Analyst

John Vinh -- KeyBanc Capital Markets, Inc. -- Analyst

Ross Seymore -- Deutsche Bank Securities, Inc. -- Analyst

Tristan Gerra -- Robert W. Baird & Co., Inc. -- Analyst

William Stein -- SunTrust Robinson Humphrey, Inc. -- Analyst

Chris Caso -- Raymond James -- Analyst

Chris Danely -- Citigroup -- Analyst

Christopher Rolland -- Susquehanna International -- Analyst

Vinayak Rao -- Morgan Stanley -- Analyst

Srini Pajjuri -- Macquarie Securities -- Analyst

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