"Platform Company" -- April 25, 2019

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I woke up in the middle of the night, excited to blog, but I had to wait. I had a great dream involving the CEO of Boeing and Jamie Dimon. Pretty funny, but true.

I had spent the evening studying Xilinx and in the process learned a new term, "platform company."

I assume I am the only one in the world, or at least the only US investor, who has never heard of the term.

I still don't quite understand the term; I think it is used by many, to mean different things. It appears it came out of the tech world.

If one were British/English, the corresponding term would be "company of companies." If Japanese, zaibatsu, or "group of companies, generally industrial and financial. But in the US, apparently, the term for a group of tech companies under one company, or a group of health companies under one company, the phrase the "in" crowd is using is "platform company."

I googled, "is Berkshire Hathaway a 'platform company'?

The second hit led me to a Motley Fool article so I knew I had stumbled on something.

Made my day.

The article talks a lot about Bill Ackman who I loathe, though perhaps in person he might be a nice guy. Whatever.

I read the article to learn about the concept of a "platform company," and ignored everything about the specifics of Bill Ackman, Warren Buffett, Valeant, etc.

And I think I'm correct:

Berkshire Hathaway, concentrating on industrial and financial: a company of companies.

Japan: zaidbatsu

US, health and teck: a "platform company."

This all started when I read the 4Q18 earnings transcript for Xilinx. 

Before I go any further: just because I loath Bill Ackman, the two-dimensional cut-out provided by CNBC, does not mean that Valeant is not something investors should ignore.

Valeant: now called Bausch, ticker symbol BHC. Currently trading at $23; pays no dividend.

By the way, if you like the market today, down 200 points (the Dow), you will love the market if Joe Biden is elected. His platform: to change direction. Not happy with Trump's focus on making America great again.

Wow, what a digression.

If you are still with me, this all began when I was reading the 4Q18 earnings transcript for Xilinx. Victor Peng, president and CEO began:

I'm very excited to report that we made exceptional progress on our strategy in fiscal 2019. We far surpassing our original revenue goal by delivering over $3 billion of revenue for the first time in our history. This was 24% growth over fiscal 2018.

Our growth was broad-based with all our primary end markets up by double digits. We also reached record levels of profitability as non-GAAP EPS increased 32% year-over-year to $3.48 per share. T

he March quarter continued to see strength as revenue increased 30% year-on-year to $828 million, and non-GAAP EPS was up 34% year-on-year to $0.94 per share.

Lorenzo will provide more financial details on both the March quarter and fiscal 2019. So now focus my comments on key accomplishments during the year.

We made excellent progress on our transformation to a platform company. First and second generation, zinc product revenue increased approximately 60% with strength and many applications in communications, automotive, particularly ADAS and industrial end markets.

We tapped out our 7-nanometer Versal ACAP on schedule, which is an industry first.

Versal will deliver 10x compute performance and 10x bandwidth and deliver power efficiency for many applications across all of our end markets.

We also launched Alveo, a family of powerful, adaptable PCIe accelerator cards that increase the performance of a broad range of applications for both cloud and on-premise deployment. And we also hosted three very successful developers conferences globally that had a record attendance as part of our drive to increase application development and expand our ecosystem. 

So that I don't forget: Xilinx' chips.

Enough for now.