UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended July ~~2, 2021~~1, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________to__________

Commission file number 001-05560

Skyworks Solutions, Inc.

(Exact name of registrant as specified in its charter)



Delaware			04-2302115
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

5260 California Avenue	Irvine	California	92617
(Address of principal executive offices)			(Zip Code)


			(949)			231-3000
			(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.25 per share	SWKS	Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. þ Yes ¨ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). þ Yes ¨ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer ☐

Non-accelerated filer ☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes þ No

As of July ~~23, 2021,~~29, 2022, the registrant had ~~165,144,931 shares~~160,445,593 shares of common stock, par value $0.25 per share, outstanding.

SKYWORKS SOLUTIONS, INC.

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTER ENDED JULY ~~2, 2021~~1, 2022

TABLE OF CONTENTS

Table of Contents

PART 1. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

SKYWORKS SOLUTIONS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited, in millions, except per share amounts)


		Three Months Ended				Nine Months Ended					Three Months Ended				Nine Months Ended
		July 2, 2021		June 26, 2020		July 2, 2021		June 26, 2020			July 1, 2022		July 2, 2021		July 1, 2022		July 2, 2021
Net revenue	Net revenue	$	1,116.4	$	736.8	$	3,798.2	$	2,398.9	Net revenue	$	1,232.6	$	1,116.4	$	4,078.6	$	3,798.2
Cost of goods sold	Cost of goods sold	557.8		402.7		1,899.5		1,244.9		Cost of goods sold	649.3		557.8		2,142.9		1,899.5
Gross profit	Gross profit	558.6		334.1		1,898.7		1,154.0		Gross profit	583.3		558.6		1,935.7		1,898.7
Operating expenses:	Operating expenses:									Operating expenses:
Research and development	Research and development	130.8		117.0		383.1		337.9		Research and development	156.5		130.8		468.4		383.1
Selling, general, and administrative	Selling, general, and administrative	85.1		55.0		222.0		169.1		Selling, general, and administrative	77.0		85.1		242.1		222.0
Amortization of intangibles	Amortization of intangibles	2.4		2.8		7.9		9.0		Amortization of intangibles	21.9		2.4		77.0		7.9
Restructuring, impairment, and other charges	Restructuring, impairment, and other charges	0.5		11.8		0.5		13.8		Restructuring, impairment, and other charges	2.1		0.5		9.3		0.5
Total operating expenses	Total operating expenses	218.8		186.6		613.5		529.8		Total operating expenses	257.5		218.8		796.8		613.5
Operating income	Operating income	339.8		147.5		1,285.2		624.2		Operating income	325.8		339.8		1,138.9		1,285.2
Interest expense	Interest expense	(2.6)		0		(2.6)		0		Interest expense	(11.3)		(2.6)		(33.6)		(2.6)
Other income (expense), net		(1.0)		(3.5)		(0.1)		1.4
Other expense, net										Other expense, net	(0.4)		(1.0)		(0.9)		(0.1)
Income before income taxes	Income before income taxes	336.2		144.0		1,282.5		625.6		Income before income taxes	314.1		336.2		1,104.4		1,282.5
Provision (benefit) for income taxes	Provision (benefit) for income taxes	(1.6)		14.3		110.5		57.7		Provision (benefit) for income taxes	46.8		(1.6)		131.4		110.5
Net income	Net income	$	337.8	$	129.7	$	1,172.0	$	567.9	Net income	$	267.3	$	337.8	$	973.0	$	1,172.0
Earnings per share:	Earnings per share:									Earnings per share:
Basic	Basic	$	2.05	$	0.78	$	7.10	$	3.36	Basic	$	1.66	$	2.05	$	5.96	$	7.10
Diluted	Diluted	$	2.02	$	0.77	$	7.02	$	3.33	Diluted	$	1.66	$	2.02	$	5.93	$	7.02
Weighted average shares:	Weighted average shares:									Weighted average shares:
Basic	Basic	165.1		167.0		165.2		169.1		Basic	160.9		165.1		163.3		165.2
Diluted	Diluted	167.0		168.3		166.9		170.3		Diluted	161.5		167.0		164.1		166.9

See accompanying Notes to Consolidated Financial Statements.

Table of Contents

SKYWORKS SOLUTIONS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited, in millions)


		Three Months Ended				Nine Months Ended					Three Months Ended				Nine Months Ended
		July 2, 2021		June 26, 2020		July 2, 2021		June 26, 2020			July 1, 2022		July 2, 2021		July 1, 2022		July 2, 2021
Net income	Net income	$	337.8	$	129.7	$	1,172.0	$	567.9	Net income	$	267.3	$	337.8	$	973.0	$	1,172.0
Other comprehensive income, net of tax
Other comprehensive income (loss), net of tax:										Other comprehensive income (loss), net of tax:
Fair value of investments	Fair value of investments	(0.2)		(0.1)		(0.5)		0.3		Fair value of investments	0.2		(0.2)		(0.2)		(0.5)
Pension adjustments	Pension adjustments	0		0		0.3		0		Pension adjustments	—		—		3.3		0.3
Comprehensive income	Comprehensive income	$	337.6	$	129.6	$	1,171.8	$	568.2	Comprehensive income	$	267.5	$	337.6	$	976.1	$	1,171.8

See accompanying Notes to Consolidated Financial Statements.

Table of Contents

SKYWORKS SOLUTIONS, INC.

CONSOLIDATED BALANCE SHEETS

(In millions, except per share amounts)


		As of					As of
		July 2, 2021		October 2, 2020			July 1, 2022		October 1, 2021
ASSETS	ASSETS	(unaudited)				ASSETS	(unaudited)
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	2,845.0	$	566.7	Cash and cash equivalents	$	643.0	$	882.9
Marketable securities	Marketable securities	129.2		408.1		Marketable securities	16.2		137.2
Receivables, net of allowances of $0.7 and $0.6, respectively		570.5		393.6
Receivables, net of allowances of $0.8 and $0.7, respectively						Receivables, net of allowances of $0.8 and $0.7, respectively	785.6		756.2
Inventory	Inventory	808.7		806.0		Inventory	1,102.0		885.0
Other current assets	Other current assets	168.5		143.2		Other current assets	361.2		204.1
Total current assets	Total current assets	4,521.9		2,317.6		Total current assets	2,908.0		2,865.4
Property, plant, and equipment, net	Property, plant, and equipment, net	1,452.2		1,249.5		Property, plant, and equipment, net	1,607.4		1,501.6
Operating lease right-of-use assets	Operating lease right-of-use assets	162.6		167.9		Operating lease right-of-use assets	208.3		166.1
Goodwill	Goodwill	1,189.8		1,189.8		Goodwill	2,176.7		2,176.7
Intangible assets, net	Intangible assets, net	34.7		53.5		Intangible assets, net	1,541.8		1,698.6
Deferred tax assets, net	Deferred tax assets, net	58.0		55.3		Deferred tax assets, net	101.5		119.5
Marketable securities	Marketable securities	3.9		5.2		Marketable securities	3.0		7.1
Other long-term assets	Other long-term assets	63.1		67.9		Other long-term assets	147.9		55.7
Total assets	Total assets	$	7,486.2	$	5,106.7	Total assets	$	8,694.6	$	8,590.7
LIABILITIES AND STOCKHOLDERS’ EQUITY	LIABILITIES AND STOCKHOLDERS’ EQUITY					LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:	Current liabilities:					Current liabilities:
Accounts payable	Accounts payable	$	319.5	$	226.9	Accounts payable	$	319.9	$	236.0
Accrued compensation and benefits	Accrued compensation and benefits	108.5		113.5		Accrued compensation and benefits	109.0		135.3
Current portion of long-term debt						Current portion of long-term debt	498.8		—
Other current liabilities	Other current liabilities	150.3		108.0		Other current liabilities	298.4		287.2
Total current liabilities	Total current liabilities	578.3		448.4		Total current liabilities	1,226.1		658.5
Long-term debt	Long-term debt	1,487.1		0		Long-term debt	1,689.4		2,235.6
Long-term tax liabilities	Long-term tax liabilities	243.8		311.3		Long-term tax liabilities	227.8		222.8
Long-term operating lease liabilities	Long-term operating lease liabilities	142.7		150.7		Long-term operating lease liabilities	189.5		144.5
Other long-term liabilities	Other long-term liabilities	31.5		32.1		Other long-term liabilities	67.2		32.2
Total liabilities	Total liabilities	2,483.4		942.5		Total liabilities	3,400.0		3,293.6
Commitments and contingencies (Note 9)	Commitments and contingencies (Note 9)					Commitments and contingencies (Note 9)
Stockholders’ equity:	Stockholders’ equity:					Stockholders’ equity:
Preferred stock, no par value: 25.0 shares authorized, no shares issued	Preferred stock, no par value: 25.0 shares authorized, no shares issued	0		0		Preferred stock, no par value: 25.0 shares authorized, no shares issued	—		—
Common stock, $0.25 par value: 525.0 shares authorized; 165.1 shares issued and 165.1 shares outstanding at July 2, 2021, and 232.3 shares issued and 165.6 shares outstanding at October 2, 2020		41.3		41.4
Common stock, $0.25 par value: 525.0 shares authorized; 166.9 shares issued and 160.7 shares outstanding at July 1, 2022, and 165.3 shares issued and 165.3 shares outstanding at October 1, 2021						Common stock, $0.25 par value: 525.0 shares authorized; 166.9 shares issued and 160.7 shares outstanding at July 1, 2022, and 165.3 shares issued and 165.3 shares outstanding at October 1, 2021	40.1		41.3
Additional paid-in capital	Additional paid-in capital	17.5		3,403.7		Additional paid-in capital	267.6		79.6
Treasury stock, at cost	Treasury stock, at cost	(0.1)		(4,093.5)		Treasury stock, at cost	(893.4)		(1.7)
Retained earnings	Retained earnings	4,952.1		4,820.4		Retained earnings	5,885.1		5,185.8
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(8.0)		(7.8)		Accumulated other comprehensive loss	(4.8)		(7.9)
Total stockholders’ equity	Total stockholders’ equity	5,002.8		4,164.2		Total stockholders’ equity	5,294.6		5,297.1
Total liabilities and stockholders’ equity	Total liabilities and stockholders’ equity	$	7,486.2	$	5,106.7	Total liabilities and stockholders’ equity	$	8,694.6	$	8,590.7

See accompanying Notes to Consolidated Financial Statements.

Table of Contents

SKYWORKS SOLUTIONS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in millions)


		Nine Months Ended					Nine Months Ended
		July 2, 2021		June 26, 2020			July 1, 2022		July 2, 2021
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net income	Net income	$	1,172.0	$	567.9	Net income	$	973.0	$	1,172.0
Adjustments to reconcile net income to net cash provided by operating activities:	Adjustments to reconcile net income to net cash provided by operating activities:					Adjustments to reconcile net income to net cash provided by operating activities:
Share-based compensation	Share-based compensation	144.3		111.6		Share-based compensation	158.2		144.3
Depreciation	Depreciation	242.9		238.2		Depreciation	289.6		242.9
Amortization of intangible assets		23.8		35.4
Amortization of intangible assets, including inventory step-up						Amortization of intangible assets, including inventory step-up	219.1		23.8
Deferred income taxes	Deferred income taxes	(2.6)		(1.8)		Deferred income taxes	30.3		(2.6)
Asset impairment charges		0		11.8
Amortization of debt discount and issuance costs						Amortization of debt discount and issuance costs	3.0		—
Other, net	Other, net	0.2		2.8		Other, net	(5.1)		0.2
Changes in assets and liabilities:	Changes in assets and liabilities:					Changes in assets and liabilities:
Receivables, net	Receivables, net	(176.9)		119.2		Receivables, net	(29.4)		(176.9)
Inventory	Inventory	(5.9)		(83.5)		Inventory	(227.8)		(5.9)
Accounts payable	Accounts payable	21.8		12.7		Accounts payable	32.5		21.8
Other current and long-term assets and liabilities	Other current and long-term assets and liabilities	(45.9)		(76.8)		Other current and long-term assets and liabilities	(255.1)		(45.9)
Net cash provided by operating activities	Net cash provided by operating activities	1,373.7		937.5		Net cash provided by operating activities	1,188.3		1,373.7
Cash flows from investing activities:	Cash flows from investing activities:					Cash flows from investing activities:
Capital expenditures	Capital expenditures	(374.8)		(243.5)		Capital expenditures	(347.7)		(374.8)
Purchased intangibles	Purchased intangibles	(7.4)		(7.6)		Purchased intangibles	(16.3)		(7.4)
Purchases of marketable securities	Purchases of marketable securities	(408.4)		(439.9)		Purchases of marketable securities	(91.4)		(408.4)
Sales and maturities of marketable securities	Sales and maturities of marketable securities	689.6		300.0		Sales and maturities of marketable securities	216.2		689.6
Receipts from the sales of property, plant, and equipment						Receipts from the sales of property, plant, and equipment	7.6		—
Net cash used in investing activities	Net cash used in investing activities	(101.0)		(391.0)		Net cash used in investing activities	(231.6)		(101.0)
Cash flows from financing activities:	Cash flows from financing activities:					Cash flows from financing activities:
Repurchase of common stock - payroll tax withholdings on equity awards	Repurchase of common stock - payroll tax withholdings on equity awards	(53.6)		(30.9)		Repurchase of common stock - payroll tax withholdings on equity awards	(85.2)		(53.6)
Repurchase of common stock - stock repurchase program	Repurchase of common stock - stock repurchase program	(195.6)		(416.5)		Repurchase of common stock - stock repurchase program	(806.5)		(195.6)
Dividends paid	Dividends paid	(248.1)		(223.5)		Dividends paid	(273.7)		(248.1)
Net proceeds from exercise of stock options	Net proceeds from exercise of stock options	7.8		52.2		Net proceeds from exercise of stock options	3.2		7.8
Proceeds from employee stock purchase plan	Proceeds from employee stock purchase plan	12.7		12.2		Proceeds from employee stock purchase plan	15.6		12.7
Proceeds from issuance of long-term debt, net	Proceeds from issuance of long-term debt, net	1,489.7		0		Proceeds from issuance of long-term debt, net	—		1,489.7
Debt financing costs	Debt financing costs	(7.3)		0		Debt financing costs	—		(7.3)
Payments of debt						Payments of debt	(50.0)		—
Net cash provided by (used in) financing activities	Net cash provided by (used in) financing activities	1,005.6		(606.5)		Net cash provided by (used in) financing activities	(1,196.6)		1,005.6
Net increase (decrease) in cash and cash equivalents	Net increase (decrease) in cash and cash equivalents	2,278.3		(60.0)		Net increase (decrease) in cash and cash equivalents	(239.9)		2,278.3
Cash and cash equivalents at beginning of period	Cash and cash equivalents at beginning of period	566.7		851.3		Cash and cash equivalents at beginning of period	882.9		566.7
Cash and cash equivalents at end of period	Cash and cash equivalents at end of period	$	2,845.0	$	791.3	Cash and cash equivalents at end of period	$	643.0	$	2,845.0
Supplemental cash flow disclosures:	Supplemental cash flow disclosures:					Supplemental cash flow disclosures:
Income taxes paid	Income taxes paid	$	136.5	$	103.4	Income taxes paid	$	167.9	$	136.5
Interest paid						Interest paid	$	29.0	$	—
Incentives paid in common stock	Incentives paid in common stock	$	27.5	$	0	Incentives paid in common stock	$	32.2	$	27.5
Non-cash investing in capital expenditures, accrued but not paid	Non-cash investing in capital expenditures, accrued but not paid	$	149.9	$	105.8	Non-cash investing in capital expenditures, accrued but not paid	$	127.3	$	149.9
Operating lease assets obtained in exchange for new lease liabilities	Operating lease assets obtained in exchange for new lease liabilities	$	15.9	$	30.5	Operating lease assets obtained in exchange for new lease liabilities	$	64.3	$	15.9
Retirement of treasury stock	Retirement of treasury stock	$	4,342.6	$	0	Retirement of treasury stock	$	—	$	4,342.6

See accompanying Notes to Consolidated Financial Statements.

Table of Contents

SKYWORKS SOLUTIONS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In millions)


																	Shares of common stock	Par value of common stock		Shares of treasury stock	Value of treasury stock		Additional paid-in capital		Retained earnings		Accumulated other comprehensive loss		Total stockholders’ equity
Balance at October 1, 2021																Balance at October 1, 2021	165.3	$	41.3	—	$	(1.7)	$	79.6	$	5,185.8	$	(7.9)	$	5,297.1
Net income																Net income	—	—		—	—		—		399.9		—		399.9
Exercise and settlement of share-based awards, net of shares withheld for taxes																Exercise and settlement of share-based awards, net of shares withheld for taxes	0.9	0.2		0.5	(80.1)		33.8		—		—		(46.1)
Share-based compensation expense																Share-based compensation expense	—	—		—	—		42.0		—		—		42.0
Stock repurchase program																Stock repurchase program	(1.7)	(0.4)		1.7	(269.4)		0.4		—		—		(269.4)
Dividends declared																Dividends declared	—	—		—	—		—		(92.5)		—		(92.5)
Other comprehensive income																Other comprehensive income	—	—		—	—		—		—		3.2		3.2
Balance at December 31, 2021																Balance at December 31, 2021	164.5	$	41.1	2.2	$	(351.2)	$	155.8	$	5,493.2	$	(4.7)	$	5,334.2
Net income																Net income	—	$	—	—	$	—	$	—	305.8		—		305.8
Exercise and settlement of share-based awards, net of shares withheld for taxes																Exercise and settlement of share-based awards, net of shares withheld for taxes	0.2	—		—	(3.5)		16.3		—		—		12.8
Share-based compensation expense																Share-based compensation expense	—	—		—	—		45.3		—		—		45.3
Stock repurchase program																Stock repurchase program	(3.0)	(0.7)		3.0	(418.0)		0.7		—		—		(418.0)
Dividends declared																Dividends declared	—	—		—	—		—		(91.2)		—		(91.2)
Other comprehensive loss																Other comprehensive loss	—	—		—	—		—		—		(0.3)		(0.3)
Balance at April 1, 2022																Balance at April 1, 2022	161.7	$	40.4	5.2	$	(772.7)	$	218.1	$	5,707.8	$	(5.0)	$	5,188.6
Net income																Net income	—	—		—	—		—		267.3		—		267.3
Exercise and settlement of share-based awards, net of shares withheld for taxes																Exercise and settlement of share-based awards, net of shares withheld for taxes	—	—		—	(1.6)		0.6		—		—		(1.0)
Share-based compensation expense																Share-based compensation expense	—	—		—	—		48.6		—		—		48.6
Dividends declared																Dividends declared	—	—		—	—		—		(90.0)		—		(90.0)
Stock repurchase program																Stock repurchase program	(1.0)	(0.3)		1.0	(119.1)		0.3		—		—		(119.1)
Other comprehensive income																Other comprehensive income	—	—		—	—		—		—		0.2		0.2
Balance at July 1, 2022																Balance at July 1, 2022	160.7	$	40.1	6.2	$	(893.4)	$	267.6	$	5,885.1	$	(4.8)	$	5,294.6
		Shares of common stock	Par value of common stock		Shares of treasury stock	Value of treasury stock		Additional paid-in capital		Retained earnings		Accumulated other comprehensive loss		Total stockholders’ equity
Balance at October 2, 2020	Balance at October 2, 2020	165.6	$	41.4	66.7	$	(4,093.5)	$	3,403.7	$	4,820.4	$	(7.8)	$	4,164.2	Balance at October 2, 2020	165.6	$	41.4	66.7	$	(4,093.5)	$	3,403.7	$	4,820.4	$	(7.8)	$	4,164.2
Net income	Net income	—	—		—	—		—		509.3		—		509.3		Net income	—	—		—	—		—		509.3		—		509.3
Exercise and settlement of share-based awards, net of shares withheld for taxes	Exercise and settlement of share-based awards, net of shares withheld for taxes	0.7	0.2		0.4	(47.8)		2.6		—		—		(45.0)		Exercise and settlement of share-based awards, net of shares withheld for taxes	0.7	0.2		0.4	(47.8)		30.1		—		—		(17.5)
Share-based compensation expense	Share-based compensation expense	—	—		—	—		64.9		—		—		64.9		Share-based compensation expense	—	—		—	—		37.4		—		—		37.4
Stock repurchase program	Stock repurchase program	(1.4)	(0.4)		1.4	(195.6)		0.4		—		—		(195.6)		Stock repurchase program	(1.4)	(0.4)		1.4	(195.6)		0.4		—		—		(195.6)
Dividends declared	Dividends declared	—	—		—	—		—		(83.0)		—		(83.0)		Dividends declared	—	—		—	—		—		(83.0)		—		(83.0)
Other comprehensive income	Other comprehensive income	—	—		—	—		—		—		0.1		0.1		Other comprehensive income	—	—		—	—		—		—		0.1		0.1
Balance at January 1, 2021	Balance at January 1, 2021	164.9	$	41.2	68.5	$	(4,336.9)	$	3,471.6	$	5,246.7	$	(7.7)	$	4,414.9	Balance at January 1, 2021	164.9	$	41.2	68.5	$	(4,336.9)	$	3,471.6	$	5,246.7	$	(7.7)	$	4,414.9
Net income	Net income	—	$	—	—	$	—	$	—	325.0		—		325.0		Net income	—	—		—	—		—		325.0		—		325.0
Exercise and settlement of share-based awards, net of shares withheld for taxes	Exercise and settlement of share-based awards, net of shares withheld for taxes	0.2	0.1		0	(3.6)		16.9		—		—		13.4		Exercise and settlement of share-based awards, net of shares withheld for taxes	0.2	0.1		—	(3.6)		16.9		—		—		13.4
Share-based compensation expense	Share-based compensation expense	—	—		—	—		41.7		—		—		41.7		Share-based compensation expense	—	—		—	—		41.7		—		—		41.7

Dividends declared	Dividends declared	—	—		—	—		—		(82.6)		—		(82.6)		Dividends declared	—	—		—	—		—		(82.6)		—		(82.6)
Other comprehensive loss	Other comprehensive loss	—	—		—	—		—		—		(0.1)		(0.1)		Other comprehensive loss	—	—		—	—		—		—		(0.1)		(0.1)
Balance at April 2, 2021	Balance at April 2, 2021	165.1	$	41.3	68.5	$	(4,340.5)	$	3,530.2	$	5,489.1	$	(7.8)	$	4,712.3	Balance at April 2, 2021	165.1	$	41.3	68.5	$	(4,340.5)	$	3,530.2	$	5,489.1	$	(7.8)	$	4,712.3
Net income	Net income	—	—		—	—		—		337.8		—		337.8		Net income	—	—		—	—		—		337.8		—		337.8
Exercise and settlement of share-based awards, net of shares withheld for taxes	Exercise and settlement of share-based awards, net of shares withheld for taxes	0	0		0	(2.2)		0.7		—		—		(1.5)		Exercise and settlement of share-based awards, net of shares withheld for taxes	—	—		—	(2.2)		0.7		—		—		(1.5)
Share-based compensation expense		—	—		—	—		36.9		—		—		36.9
Retirement of treasury stock		—	—		(68.5)	4,342.6		(3,550.3)		(792.3)		—		0
Dividends declared		—	—		—	—		—		(82.5)		—		(82.5)
Other comprehensive loss		—	—		—	—		—		—		(0.2)		(0.2)
Balance at July 2, 2021		165.1	$	41.3	0	$	(0.1)	$	17.5	$	4,952.1	$	(8.0)	$	5,002.8

Balance at September 27, 2019		170.1	$	42.5	60.1	$	(3,412.9)	$	3,188.0	$	4,312.6	$	(7.9)	$	4,122.3
Net income		—	—		—	—		—		257.1		—		257.1
Exercise and settlement of share-based awards, net of shares withheld for taxes		1.1	0.3		0.3	(26.7)		34.6		—		—		8.2
Share-based compensation expense		—	—		—	—		29.1		—		—		29.1
Stock repurchase program		(0.7)	(0.2)		0.7	(74.2)		0.2		—		—		(74.2)
Dividends declared		—	—		—	—		—		(75.1)		—		(75.1)
Other comprehensive loss		—	—		—	—		—		—		(0.1)		(0.1)
Balance at December 27, 2019		170.5	$	42.6	61.1	$	(3,513.8)	$	3,251.9	$	4,494.6	$	(8.0)	$	4,267.3
Net income		—	—		—	—		—		181.1		—		181.1
Exercise and settlement of share-based awards, net of shares withheld for taxes		0.3	0.1		0	(2.0)		20.4		—		—		18.5
Share-based compensation expense		—	—		—	—		34.1		—		—		34.1
Stock repurchase program		(3.2)	(0.8)		3.2	(283.8)		0.8		—		—		(283.8)
Dividends declared		—	—		—	—		—		(74.9)		—		(74.9)
Other comprehensive income		—	—		—	—		—		—		0.5		0.5
Balance at March 27, 2020		167.6	$	41.9	64.3	$	(3,799.6)	$	3,307.2	$	4,600.8	$	(7.5)	$	4,142.8
Net income		—	—		—	—		—		129.7		—		129.7
Exercise and settlement of share-based awards, net of shares withheld for taxes		0.2	0.1		0	(2.2)		8.9		—		—		6.8

Table of Contents


Share-based compensation expense	Share-based compensation expense	—	—		—	—		35.2		—		—		35.2		Share-based compensation expense	—	—		—	—		36.9		—		—		36.9
Stock repurchase program		(0.7)	(0.2)		0.7	(58.5)		0.2		—		—		(58.5)
Retirement of treasury stock																Retirement of treasury stock	—	—		(68.5)	4,342.6		(3,550.3)		(792.3)		—		—
Dividends declared	Dividends declared	—	—		—	—		—		(73.5)		—		(73.5)		Dividends declared	—	—		—	—		—		(82.5)		—		(82.5)
Other comprehensive loss	Other comprehensive loss	—	—		—	—		—		—		(0.1)		(0.1)		Other comprehensive loss	—	—		—	—		—		—		(0.2)		(0.2)
Balance at June 26, 2020		167.1	$	41.8	65.0	$	(3,860.3)	$	3,351.5	$	4,657.0	$	(7.6)	$	4,182.4
Balance at July 2, 2021																Balance at July 2, 2021	165.1	$	41.3	—	$	(0.1)	$	17.5	$	4,952.1	$	(8.0)	$	5,002.8

See accompanying Notes to Consolidated Financial Statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION ~~AND SIGNIFICANT ACCOUNTING POLICIES~~

Skyworks Solutions, Inc., together with its consolidated subsidiaries (“Skyworks” or the “Company”), is empowering the wireless networking revolution. The Company’s analog semiconductors are connecting people, places, and things, spanning a number of new applications within the aerospace, automotive, broadband, cellular infrastructure, connected home, entertainment and gaming, industrial, medical, military, smartphone, tablet, and wearable markets.

The accompanying unaudited interim consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial reporting. Certain information and footnote disclosures, normally included in annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), have been condensed or omitted pursuant to those rules and regulations. However, in management’s opinion, the financial information reflects all adjustments, including those of a normal recurring nature, necessary to present fairly the results of operations, financial position, and cash flows of the Company for the periods presented. The results of operations, financial position, and cash flows for the Company during the interim periods are not necessarily indicative of those expected for the full year. This information should be read in conjunction with the Company’s financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the fiscal year ended October ~~2, 2020,~~1, 2021, filed with the SEC on November ~~17, 2020,~~24, 2021, as amended by Amendment No. 1 to such Annual Report on Form 10-K, filed with the SEC on January ~~29,~~ 28, 2022 (“2021 ~~(“2020~~ 10-K”).

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts of assets, liabilities, revenue, expenses, comprehensive income, and accumulated other comprehensive loss that are reported ~~in these unaudited consolidated financial statements and accompanying disclosures.~~during the reporting period. The Company evaluates its estimates on an ongoing basis using historical experience and other factors, including the current economic environment. Judgment is required in determining the reserves for, and fair value of, items such as overall fair value assessments of assets and liabilities, particularly those classified as Level 2 or Level 3 in the fair value hierarchy, marketable securities, inventory, intangible assets associated with business combinations, share-based compensation, revenue reserves, loss contingencies, and income taxes. In addition, judgment is required in determining whether a potential indicator of impairment of long-lived assets exists and in estimating future cash flows for any necessary impairment testing. Actual results could differ significantly from these estimates.

The Company’s fiscal year ends on the Friday closest to September 30. Fiscal ~~2021~~2022 consists of 52 weeks and ends on ~~October 1, 2021.~~September 30, 2022. Fiscal ~~2020~~2021 consisted of 5352 weeks and ended on October ~~2, 2020.~~1, 2021. The three and nine months ended July 1, 2022, and July 2, 2021, ~~and June 26, 2020,~~ each consisted of 13 weeks and 39 weeks, respectively.

~~Treasury Stock~~

The Company accounts for treasury stock using the cost method. The Company accounts for the retirement of treasury stock by charging any excess of cost over par value as a deduction from additional paid-in capital and the remaining excess as a deduction to retained earnings on the consolidated balance sheets. Retired treasury shares revert to the status of authorized but unissued shares.

2. REVENUE RECOGNITION

The Company presents net revenue by geographic area, based upon the location of the original equipment manufacturers’ (“OEMs”) headquarters, and by sales channel, as it believes that doing so best depicts how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. Individually insignificant OEMs are presented based upon the location of the Company's direct customer, which is typically a distributor. Net revenue by geographic area is as follows (in millions):


	Three Months Ended				Nine Months Ended
	July 1, 2022		July 2, 2021		July 1, 2022		July 2, 2021
United States	$	813.0	$	636.0	$	2,630.9	$	2,372.6
China	98.9		262.0		487.8		759.6
South Korea	146.4		70.6		398.6		205.0
Taiwan	99.7		90.4		324.3		310.6
Europe, Middle East, and Africa	58.3		49.5		180.6		128.7
Other Asia-Pacific	16.3		7.9		56.4		21.7
Total net revenue	$	1,232.6	$	1,116.4	$	4,078.6	$	3,798.2

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Three Months Ended Nine Months Ended
July 2,
2021 June 26,
2020 July 2,
2021 June 26,
2020
United States $ 636.0 $ 425.2 $ 2,372.6 $ 1,431.0
China 262.0 166.5 759.6 512.9
Taiwan 90.4 64.9 310.6 165.9
South Korea 70.6 46.0 205.0 178.9
Europe, Middle East, and Africa 49.5 29.0 128.7 91.9
Other Asia-Pacific 7.9 5.2 21.7 18.3
Total $ 1,116.4 $ 736.8 $ 3,798.2 $ 2,398.9
Net revenue by sales channel is as follows (in millions):


	Three Months Ended				Nine Months Ended
	July 1, 2022		July 2, 2021		July 1, 2022		July 2, 2021
Distributors	$	947.8	$	982.7	$	3,309.3	$	3,396.1
Direct customers	284.8		133.7		769.3		402.1
Total net revenue	$	1,232.6	$	1,116.4	$	4,078.6	$	3,798.2

The Company’s revenue from external customers is generated principally from the sale of semiconductor products that facilitate various wireless communication applications. Accordingly, the Company considers its product offerings to be similar in nature and therefore not segregated for reporting purposes.

3. MARKETABLE SECURITIES

The ~~Company's~~Company’s portfolio of available-for-sale marketable securities consists of the following (in millions):


		Current				Noncurrent					Current				Noncurrent
Available for sale:		July 2, 2021		October 2, 2020		July 2, 2021		October 2, 2020
											July 1, 2022		October 1, 2021		July 1, 2022		October 1, 2021
U.S. Treasury and government	U.S. Treasury and government	$	10.5	$	129.4	$	3.3	$	5.0	U.S. Treasury and government	$	8.0	$	7.6	$	2.9	$	6.0
Corporate bonds and notes	Corporate bonds and notes	106.8		276.8		0		0		Corporate bonds and notes	—		117.0		—		—
Municipal bonds	Municipal bonds	11.9		1.9		0.6		0.2		Municipal bonds	8.2		12.6		0.1		1.1
Total		$	129.2	$	408.1	$	3.9	$	5.2
Total marketable securities										Total marketable securities	$	16.2	$	137.2	$	3.0	$	7.1

The contractual maturities of noncurrent available-for-sale marketable securities were ~~due~~ within two years or ~~less. There were no~~less of issuance of the applicable securities. Neither gross unrealized gains orand losses nor realized gains and losses were material as of July ~~2, 2021. There were gross unrealized gains of $0.3 million on U.S. Treasury securities~~1, 2022, and ~~$0.2 million on corporate bonds and notes as of~~ October ~~2, 2020.~~

1, 2021, respectively.

4. FAIR VALUE

Assets and Liabilities Measured and Recorded at Fair Value on a Recurring Basis

The Company groups its financial assets and liabilities measured at fair value on a recurring basis in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. These levels are:

•Level 1 - Quoted prices in active markets for identical assets or liabilities.

•Level 2 - Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets with insufficient volume or infrequent transactions (less-active markets), or model-driven valuations in which all significant inputs are observable or can be derived principally from, or corroborated with, observable market data.

•Level 3 - Fair value is derived from valuation techniques in which one or more significant inputs are unobservable, including assumptions and judgments made by the Company.

Table of Contents

Assets and liabilities recorded at fair value on a recurring basis consisted of the following (in millions):

~~Table of Contents~~


																			As of
		As of July 2, 2021								As of October 2, 2020									July 1, 2022								October 1, 2021
				Fair Value Measurements								Fair Value Measurements									Fair Value Measurements								Fair Value Measurements
		Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3			Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
Assets	Assets																	Assets
Cash and cash equivalents*	Cash and cash equivalents*	$	2,845.0	$	2,845.0	$	0	$	0	$	566.7	$	561.2	$	5.5	$	0	Cash and cash equivalents*	$	643.0	$	643.0	$	—	$	—	$	882.9	$	882.9	$	—	$	—
U.S. Treasury and government securities	U.S. Treasury and government securities	13.8		4.4		9.4		0		134.4		43.2		91.2		0		U.S. Treasury and government securities	10.9		1.2		9.7		—		13.6		2.6		11.0		—
Corporate bonds and notes	Corporate bonds and notes	106.8		0		106.8		0		276.8		0		276.8		0		Corporate bonds and notes	—		—		—		—		117.0		—		117.0		—
Municipal bonds	Municipal bonds	12.5		0		12.5		0		2.1		0		2.1		0		Municipal bonds	8.3		—		8.3		—		13.7		—		13.7		—
Total		$	2,978.1	$	2,849.4	$	128.7	$	0	$	980.0	$	604.4	$	375.6	$	0
Total assets at fair value																		Total assets at fair value	$	662.2	$	644.2	$	18.0	$	—	$	1,027.2	$	885.5	$	141.7	$	—

* Cash equivalents included in Levels 1 and 2 consist of money market funds and corporate bonds and notes, commercial paper, and agency securities purchased with less than ninety days until maturity.

Assets Measured and Recorded at Fair Value on a Nonrecurring Basis

The Company’s non-financial assets and liabilities, such as goodwill, intangible assets, and other long-lived assets resulting from business combinations, are measured at fair value using income approach valuation methodologies at the date of acquisition and are subsequently re-measured if there are indicators of impairment. There were no indicators of impairment identified during the three and nine months ended July 1, 2022.

Fair Value of Debt

The Company’s debt is carried at amortized cost and is measured at fair value quarterly for disclosure purposes. The estimated fair values are based on Level 2 ~~2021.~~inputs as the fair value is based on quoted prices for the Company’s debt and comparable instruments in inactive markets. The carrying value of the Term Loan (as defined below) approximates its fair value as the Term Loan is carried at a market observable interest rate that resets periodically.

The carrying amount and estimated fair value of debt consists of the following (in millions):


	As of
	July 1, 2022				October 1, 2021
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
0.90% Senior Notes due 2023	$	498.8	$	486.4	$	498.2	$	501.0
1.80% Senior Notes due 2026	496.6		445.8		496.2		507.5
3.00% Senior Notes due 2031	494.4		414.6		494.0		514.6
Total debt	$	1,489.8	$	1,346.8	$	1,488.4	$	1,523.1

5. INVENTORY

Inventory consists of the following (in millions):


		As of					As of
		July 2, 2021		October 2, 2020			July 1, 2022		October 1, 2021
Raw materials	Raw materials	$	56.0	$	37.8	Raw materials	$	73.1	$	62.2
Work-in-process	Work-in-process	593.8		566.4		Work-in-process	770.8		595.9
Finished goods	Finished goods	157.4		198.9		Finished goods	254.5		224.4
Finished goods held on consignment by customers	Finished goods held on consignment by customers	1.5		2.9		Finished goods held on consignment by customers	3.6		2.5
Total inventory	Total inventory	$	808.7	$	806.0	Total inventory	$	1,102.0	$	885.0

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6. PROPERTY, PLANT, AND EQUIPMENT, NET

Property, plant, and equipment, net consists of the following (in millions):


		As of					As of
		July 2, 2021		October 2, 2020			July 1, 2022		October 1, 2021
Land and improvements	Land and improvements	$	11.8	$	11.8	Land and improvements	$	11.9	$	11.9
Buildings and improvements	Buildings and improvements	443.3		424.8		Buildings and improvements	535.9		470.7
Furniture and fixtures	Furniture and fixtures	54.6		46.5		Furniture and fixtures	70.4		60.2
Machinery and equipment	Machinery and equipment	2,897.0		2,556.1		Machinery and equipment	3,256.3		2,990.2
Construction in progress	Construction in progress	186.0		140.7		Construction in progress	174.6		177.0
Total property, plant, and equipment, gross	Total property, plant, and equipment, gross	3,592.7		3,179.9		Total property, plant, and equipment, gross	4,049.1		3,710.0
Accumulated depreciation	Accumulated depreciation	(2,140.5)		(1,930.4)		Accumulated depreciation	(2,441.7)		(2,208.4)
Total property, plant, and equipment, net	Total property, plant, and equipment, net	$	1,452.2	$	1,249.5	Total property, plant, and equipment, net	$	1,607.4	$	1,501.6

7. GOODWILL AND INTANGIBLE ASSETS

There were 0no changes to the carrying amount of goodwill during the three and nine months ended ~~July 2, 2021.~~July��1, 2022.

The Company tests its goodwill for impairment annually as of the first day of its fourth fiscal quarter and in interim periods if certain events occur indicating the carrying value of goodwill may be impaired. There were no indicators of impairment noted during the three and nine months ended July ~~2, 2021.~~

~~Table of Contents~~

1, 2022.

Intangible assets consist of the following (in millions):

As of As of
Weighted
Average
Amortization
Period (Years) July 2, 2021 October 2, 2020

Gross
Carrying
Amount
Accumulated
Amortization
Net
Carrying
Amount
Gross
Carrying Amount
Accumulated
Amortization
Net
Carrying
Amount
Customer relationships 5.0 $ 18.2 $ (18.2) $ 0 $ 18.2 $ (15.8) $ 2.4
Developed technology and other 4.6 76.6 (55.1) 21.5 101.0 (81.6) 19.4
Trademarks 3.0 0 0 0 1.6 (1.5) 0.1
Technology licenses 2.7 31.5 (22.1) 9.4 26.3 (14.2) 12.1
IPR&D 3.8 0 3.8 19.5 0 19.5
Total intangible assets $ 130.1 $ (95.4) $ 34.7 $ 166.6 $ (113.1) $ 53.5


		As of						As of
	Weighted Average Amortization Period (Years)	July 1, 2022						October 1, 2021
		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Customer relationships and backlog	2.3	154.6		(100.6)		54.0		174.3		(44.0)		130.3
Developed technology and other	4.1	1,154.7		(160.6)		994.1		1,036.9		(88.0)		948.9
Technology licenses	2.8	103.4		(37.4)		66.0		48.4		(23.9)		24.5
In-process research and development		427.7		—		427.7		594.9		—		594.9
Total intangible assets		$	1,840.4	$	(298.6)	$	1,541.8	$	1,854.5	$	(155.9)	$	1,698.6

Fully amortized intangible assets are eliminated from both the gross and accumulated amortization amounts in the first quarter of each fiscal year.

During the nine months ended July 1, 2022, $167.2 million of in-process research and development (“IPR&D”) assets were transferred to definite-lived intangible assets, and are being amortized over their weighted-average useful lives of 6.6 years. Amortization expense related to definite-lived intangible assets was $65.9 million and $211.8 million for the three and nine months ended July 1, 2022, respectively. Amortization expense related to definite-lived intangible assets was $6.3 million and $23.8 million for the three and nine months ended July 2, 2021, respectively.

Annual amortization expense for the next five fiscal years related to definite-lived intangible assets, excluding IPR&D, is expected to be as follows (in millions):

Remaining 2021 2022 2023 2024 2025 Thereafter
Amortization expense, cost of goods sold $ 1.3 $ 5.4 $ 5.4 $ 1.9 $ 0.1 $ 1.7
Amortization expense, operating expense $ 3.5 $ 6.2 $ 1.8 $ 1.4 $ 1.1 $ 1.1
Total amortization expense $ 4.8 $ 11.6 $ 7.2 $ 3.3 $ 1.2 $ 2.8


	Remaining 2022		2023		2024		2025		2026		Thereafter


Amortization expense	$	68.2	$	212.2	$	164.8	$	144.0	$	119.8	$	405.1

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8. INCOME TAXES

The provision for income taxes consists of the following components (in millions):

Three Months Ended Nine Months Ended
July 2,
2021 June 26,
2020 July 2,
2021 June 26,
2020
United States income taxes $ (13.8) $ 4.1 $ 63.7 $ 27.3
Foreign income taxes 12.2 10.2 46.8 30.4
Provision (benefit) for income taxes $ (1.6) $ 14.3 $ 110.5 $ 57.7
Effective tax rate (0.5) % 9.9 % 8.6 % 9.2 %


	Three Months Ended						Nine Months Ended
	July 1, 2022			July 2, 2021			July 1, 2022			July 2, 2021
United States income taxes	35.8			(13.8)			88.5			63.7
Foreign income taxes	11.0			12.2			42.9			46.8
Provision (benefit) for income taxes	$	46.8		$	(1.6)		$	131.4		$	110.5

Effective tax rate	14.9		%	(0.5)		%	11.9		%	8.6		%

The difference between the Company’s effective tax rate and the 21.0% United States federal statutory rate for the three and nine months ended July 1, 2022, and July 2, 2021, ~~and June 26, 2020,~~ respectively, resulted primarily from foreign earnings taxed at rates lower than the federal statutory rate, ~~a benefit related to a change in the reserve for uncertain tax positions,~~ a benefit from foreign-derived intangible income deduction (“FDII”), windfall tax deductions, and research and experimentation and foreign tax credits earned, partially offset by a tax on global intangible low-taxed income (“GILTI”).

~~During fiscal 2021, the Company concluded an Internal Revenue Service (“IRS”) examination of its federal income~~, and tax ~~returns for fiscal 2015 and 2016. With the conclusion of the audit, the Company decreased~~expense related to a change in the reserve for uncertain tax ~~positions, which resulted in the recognition of an income tax benefit of $42.8 million and $34.8 million during the three and nine months ended July 2, 2021, respectively.~~

The Company operates under a tax holiday in Singapore, which is effective through September 30, 2030. The current tax holiday is conditioned upon the Company’s compliance with certain employment and investment thresholds in Singapore.positions.

9. COMMITMENTS AND CONTINGENCIES

~~Table of Contents~~

Legal Matters

From time to time, various lawsuits, claims, and proceedings have been, and may in the future be, instituted or asserted against the Company, including those pertaining to patent infringement, intellectual property, environmental hazards, product liability and warranty, safety and health, employment, and contractual matters.

The semiconductor industry is characterized by vigorous protection and pursuit of intellectual property rights. From time to time, third parties have asserted and may in the future assert patent, copyright, trademark, and other intellectual property rights to technologies that are important to the Company’s business and have demanded and may in the future demand that the Company license their technology. The outcome of any such litigation cannot be predicted with certainty and some such lawsuits, claims, or proceedings may be disposed of unfavorably to the Company. Generally speaking, intellectual property disputes often have a risk of injunctive relief, which, if imposed against the Company, could materially and adversely affect the Company’s financial condition or results of operations. From time to time the Company may also be involved in legal proceedings in the ordinary course of business.

The Company monitors the status of legal proceedings and other contingencies on an ongoing basis to ensure loss contingencies are recognized and/or disclosed in its financial statements and footnotes. The Company does not believe there are any pending legal proceedings that are reasonably possible to result in a material loss. The Company is engaged in various legal actions in the normal course of business and, while there can be no assurances, the Company believes the outcome of all pending litigation involving the Company will not have, individually or in the aggregate, a material adverse effect on its business or financial statements.

Guarantees and Indemnities

The Company has made no significant contractual guarantees for the benefit of third parties. However, the Company generally indemnifies its customers from third-party intellectual property infringement litigation claims related to its products and, on occasion, also provides other indemnities related to product sales. In connection with certain facility leases, the Company has indemnified its lessors for certain claims arising from the facility or the lease.

The Company indemnifies its directors and officers to the maximum extent permitted under the laws of the state of Delaware. The duration of the indemnities varies and in many cases is indefinite. The indemnities to customers in connection with product sales generally are subject to limits based upon the amount of the related product sales and in many cases are subject to geographic and other restrictions. In certain instances, the Company’s indemnities do not provide for any limitation of the maximum potential future payments the Company could be obligated to make. The Company has not recorded any liability for these indemnities in the accompanying consolidated balance sheets and does not expect that such obligations will have a material adverse impact on its financial statements.

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10. STOCKHOLDERS’ EQUITY

Stock Repurchase ~~Program~~

On January 26, 2021, the Board of Directors approved a stock repurchase program, pursuant to which the Company is authorized to repurchase up to $2.0 billion of its common stock from time to time prior to January 26, 2023, on the open market or in privately negotiated transactions, as permitted by securities laws and other legal requirements. This authorized stock repurchase ~~plan~~program replaced in its entirety the January 30, 2019, stock repurchase program. The timing and amount of any shares of the Company’s common stock that are repurchased under the repurchase program are determined by the Company’s management based on its evaluation of market conditions and other factors.

During the three months ended July 1, 2022, the Company paid $119.1 million (including commissions) in connection with the repurchase of 1.0 million shares of its common stock (paying an average price of $119.07 per share). During the nine months ended July 1, 2022, the Company paid $806.5 million (including commissions) in connection with the repurchase of 5.7 million shares of its common stock (paying an average price of $141.30 per share), all of which shares were repurchased pursuant to the January 26, 2021, stock repurchase program. As of July 1, 2022, $1.2 billion remained available under the January 26, 2021, stock repurchase program.

During the three months ended July 2, 2021, the Company did not repurchase any shares of its common stock. During the nine months ended July 2, 2021, the Company paid $195.6 million (including commissions) in connection with the repurchase of 1.4 million shares of its common stock (paying an average price of $138.85 per share), all of which shares were repurchased pursuant to the January 30, 2019, stock repurchase program. As of July 2, 2021, $2.0 billion remained available under the January 26, 2021, stock repurchase program. In connection with the Asset Purchase and the debt incurred to finance the Asset Purchase (as discussed in Notes 13 and 14 of the Notes to Consolidated Financial Statements), the Company has temporarily suspended repurchase activities under the January 26, 2021, stock repurchase program.

~~During the three and nine months ended July 2, 2021, the Board of Directors approved the retirement of 68.5 million shares of treasury stock at an aggregated historical cost of $4,342.6 million.~~

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During the three months ended June 26, 2020, the Company paid $58.5 million (including commissions) in connection with the repurchase of 0.7 million shares of its common stock (paying an average price of $87.42 per share). During the nine months ended June 26, 2020, the Company paid $416.5 million (including commissions) in connection with the repurchase of 4.6 million shares of its common stock (paying an average price of $89.56 per share).

Dividends

On ~~July 29, 2021,~~August 4, 2022, the Company announced that the Board of Directors had declared a cash dividend on the Company’s common stock of ~~$0.56~~$0.62 per share. This dividend is payable on September ~~7, 2021,~~15, 2022, to the Company’s stockholders of record as of the close of business on August ~~17, 2021.~~25, 2022.

Dividends charged to retained earnings were as follows (in millions, except per share data):


		2021				2020					2022				2021
		Per Share		Total Amount		Per Share		Total Amount			Per Share		Total Amount		Per Share		Total Amount
First quarter	First quarter	$	0.50	$	83.0	$	0.44	$	75.1	First quarter	$	0.56	$	92.5	$	0.50	$	83.0
Second quarter	Second quarter	0.50		82.6		0.44		74.9		Second quarter	0.56		91.2		0.50		82.6
Third quarter	Third quarter	0.50		82.5		0.44		73.5		Third quarter	0.56		90.0		0.50		82.5
Total		$	1.50	$	248.1	$	1.32	$	223.5
Total dividends										Total dividends	$	1.68	$	273.7	$	1.50	$	248.1

Share-based Compensation

The following table summarizes the share-based compensation expense by line item in the Consolidated Statements of Operations (in millions):


		Three Months Ended				Nine Months Ended					Three Months Ended				Nine Months Ended
		July 2, 2021		June 26, 2020		July 2, 2021		June 26, 2020			July 1, 2022		July 2, 2021		July 1, 2022		July 2, 2021
Cost of goods sold	Cost of goods sold	$	4.9	$	4.7	$	24.0	$	16.1	Cost of goods sold	$	8.0	$	4.9	$	22.9	$	24.0
Research and development	Research and development	17.9		17.0		62.2		49.0		Research and development	24.2		17.9		74.4		62.2
Selling, general, and administrative	Selling, general, and administrative	20.6		16.1		58.1		46.5		Selling, general, and administrative	19.9		20.6		60.9		58.1
Total share-based compensation	Total share-based compensation	$	43.4	$	37.8	$	144.3	$	111.6	Total share-based compensation	$	52.1	$	43.4	$	158.2	$	144.3

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11. EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted earnings per share (in millions, except per share amounts):

Three Months Ended Nine Months Ended
July 2,
2021 June 26,
2020 July 2,
2021 June 26,
2020
Net income $ 337.8 $ 129.7 $ 1,172.0 $ 567.9
Weighted average shares outstanding – basic 165.1 167.0 165.2 169.1
Dilutive effect of equity-based awards 1.9 1.3 1.7 1.2
Weighted average shares outstanding – diluted 167.0 168.3 166.9 170.3
Net income per share – basic $ 2.05 $ 0.78 $ 7.10 $ 3.36
Net income per share – diluted $ 2.02 $ 0.77 $ 7.02 $ 3.33
Anti-dilutive common stock equivalents 0 0 0 0.2


	Three Months Ended				Nine Months Ended
	July 1, 2022		July 2, 2021		July 1, 2022		July 2, 2021
Net income	$	267.3	$	337.8	$	973.0	$	1,172.0

Weighted average shares outstanding – basic	160.9		165.1		163.3		165.2
Dilutive effect of equity-based awards	0.6		1.9		0.8		1.7
Weighted average shares outstanding – diluted	161.5		167.0		164.1		166.9

Net income per share – basic	$	1.66	$	2.05	$	5.96	$	7.10
Net income per share – diluted	$	1.66	$	2.02	$	5.93	$	7.02

Anti-dilutive common stock equivalents	1.3		—		0.8		—

Basic earnings per share are calculated by dividing net income by the weighted average number of shares of the Company’s common stock outstanding during the period. The calculation of diluted earnings per share includes the dilutive effect of equity-based awards that were outstanding during the three and nine months ended July 1, 2022, and July 2, 2021, ~~and June 26, 2020,~~ using the treasury stock method. Shares issuable upon the vesting of performance stock awards are likewise included in the calculation of diluted earnings per share as of the date the condition(s) have been satisfied, assuming the end of the reporting period was the end of the

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contingency period. Certain of the Company’s outstanding share-based awards, noted in the table above, were excluded because they were anti-dilutive, but they could become dilutive in the future.

12. SUPPLEMENTAL FINANCIAL INFORMATION

Other current liabilities consist of the following (in millions):


		As of					As of
		July 2, 2021		October 2, 2020			July 1, 2022		October 1, 2021
Accrued taxes	Accrued taxes	$	65.0	$	31.2	Accrued taxes	$	68.6	$	88.6
Operating lease liability		31.5		28.2
Short-term operating lease liabilities						Short-term operating lease liabilities	24.5		33.0
Accrued customer liabilities	Accrued customer liabilities	28.8		20.3		Accrued customer liabilities	169.0		119.7
Other	Other	25.0		28.3		Other	36.3		45.9
Total other current liabilities	Total other current liabilities	$	150.3	$	108.0	Total other current liabilities	$	298.4	$	287.2

Other ~~income (expense), net consists~~current assets consist of the following (in millions):

Three Months Ended Nine Months Ended
July 2,
2021 June 26,
2020 July 2,
2021 June 26,
2020
Interest income $ 0.3 $ 1.2 $ 1.1 $ 8.8
Net gains (losses) on marketable securities 0.1 0 0.1 0.1
Other income 1.2 5.4 4.0 7.4
Other expense (2.6) (10.1) (5.3) (14.9)
Total other income (expense), net $ (1.0) $ (3.5) $ (0.1) $ 1.4

~~13. DEBT~~

~~Long-term debt consists of the following (in millions, except percentages):~~

As of
Effective Interest Rate July 2,
2021 October 2,
2020
0.90% Senior Notes due 2023 1.15 % $ 500.0 $ 0
1.80% Senior Notes due 2026 1.97 % 500.0 0
3.00% Senior Notes due 2031 3.13 % 500.0 0
Unamortized debt discount and issuance costs (12.9) 0
Total debt $ 1,487.1 $ 0

~~Senior Notes~~

On May 26, 2021, the Company issued $500.0 million of its 0.90% Senior Notes due 2023 (the “2023 Notes”), $500.0 million of its 1.80% Senior Notes due 2026 (the “2026 Notes”), and $500.0 million of its 3.00% Senior Notes due 2031 (the “2031 Notes” and, together with the 2023 Notes and the 2026 Notes, the “Notes”). The Notes are senior unsecured obligations of the Company and rank equally in right of payment with all of its existing and future senior unsecured debt but effectively junior to any of the Company’s senior secured debt to the extent of the value of collateral securing such debt, and are structurally subordinated to all existing and future obligations of the Company’s subsidiaries. The Notes will mature on each respective maturity date, unless earlier redeemed in accordance with their terms. Interest on the Notes is payable on June 1 and December 1 of each year.

The Company may redeem all or a portion of the 2023 Notes at any time after June 1, 2022, and all or a portion of the 2026 Notes and the 2031 Notes at any time and from time to time prior to maturity, in whole or in part, for cash at the applicable redemption prices set forth in the respective supplemental indenture. If the Company undergoes a change of control repurchase event, as defined in the indenture governing the Notes (as supplemented, the “Indenture”), holders may require the Company to repurchase the Notes in whole or in part for cash at a price equal to 101% of the principal amount of the Notes to be purchased, plus any accrued and unpaid interest.


	As of
	July 1, 2022		October 1, 2021
Prepaid expenses	$	204.9	$	106.7
Other	156.3		97.4
Total other current assets	$	361.2	$	204.1

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The terms of the Indenture provided that, if (i) the consummation of the Asset Purchase (as defined in Note 14 of the Notes to Consolidated Financial Statements) had not occurred prior to 5:00 p.m., New York City time, on October 29, 2021, (ii) the Company had notified the trustee and the holders of the 2023 Notes that it would not pursue the consummation of the Asset Purchase or (iii) the Asset Purchase Agreement had been terminated without the consummation of the Asset Purchase, the 2023 Notes would be subject to a special mandatory redemption at 101% of the principal amount of the Notes then outstanding plus accrued interest. The 2026 Notes and the 2031 Notes were not subject to any special mandatory redemption if the Asset Purchase had not been completed. As of July 2, 2021, the Company considered the likelihood of acceleration and recorded the Notes as long-term debt, net of discount and issuance costs, which are amortized to interest expense over the respective terms of these borrowings.

The Indenture contains customary events of default, including failure to make required payments of principal and interest, certain events of bankruptcy and insolvency, and default in the performance or breach of any covenant or warranty contained in the Indenture or the Notes.

~~Term Credit Agreement~~

On May 21, 2021, the Company entered into a term credit agreement (the “Term Credit Agreement”) providing for a $1.0 billion term loan facility (the “Term Loan Facility”). As of July 2, 2021, there were 0 borrowings outstanding under the Term Credit Agreement.

~~Borrowings under the Term Loan Facility are not currently guaranteed by any of the Company’s subsidiaries.~~

The Term Credit Agreement contains customary representations and warranties and covenants, including restrictions on the incurrence of indebtedness by non-guarantor subsidiaries and the creation of liens, and a financial covenant consisting of a limitation on leverage, defined as consolidated total indebtedness divided by consolidated earnings before interest, taxes, depreciation, and amortization for the period of four consecutive quarters not to exceed a ratio of 3.0 to 1.0. The Term Credit Agreement also contains customary events of default, which include failure to make required payments of principal and interest, breaches of representations and warranties, changes of control or failures to pay money judgments and certain defaults in respect of specified material indebtedness, upon the occurrence of which, among other remedies, the lenders may accelerate the maturity of the indebtedness and other obligations under the Term Credit Agreement.

~~Revolving Credit Agreement~~

On May 21, 2021, the Company entered into a revolving credit agreement (the “Revolving Credit Agreement”) providing for a $750 million revolving credit facility (the “Revolver”). The proceeds of the Revolver will be used for general corporate purposes and working capital needs of the Company and its subsidiaries.

The Revolver provides for revolving credit borrowings and letters of credit, with sublimits for letters of credit. The Revolver may be increased in specified circumstances by up to $250 million at the discretion of the lenders. The Revolver matures on July 26, 2026, and all unpaid borrowings, together with accrued and unpaid interest thereon, are repayable at maturity.

The Revolving Credit Agreement contains customary representations and warranties and covenants, including restrictions on the incurrence of indebtedness by non-guarantor subsidiaries and the creation of liens, and a financial covenant consisting of a limitation on leverage, defined as consolidated total indebtedness divided by consolidated earnings before interest, taxes, depreciation, and amortization for the period of four consecutive quarters not to exceed a ratio of 3.0 to 1.0. As of July 2, 2021, there were 0 borrowings outstanding under the Revolver.

~~Fair Value of Debt~~

The Company’s debt is carried at amortized cost and is measured at fair value quarterly for disclosure purposes. The estimated fair values are based on Level 2 inputs as the fair value is based on quoted prices for the Company’s debt and comparable instruments in inactive markets.

~~The estimated fair value of debt consists of the following (in millions):~~

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As of
July 2,
2021 October 2,
2020
0.90% Senior Notes due 2023 $ 501.6 $ 0
1.80% Senior Notes due 2026 507.0 0
3.00% Senior Notes due 2031 513.1 0
Total debt $ 1,521.7 $ 0

~~14. SUBSEQUENT EVENTS~~

On July 26, 2021, the Company completed the acquisition of certain assets, rights, and properties, and the assumption of certain liabilities, comprising Silicon Laboratories Inc. (“Silicon Labs”) Infrastructure and Automotive business (the “Business”) in an all-cash transaction valued at $2.75 billion (the “Asset Purchase”).

The Company expects to account for the Asset Purchase as a business combination and is currently evaluating the purchase price allocation. It is not practicable to disclose the preliminary purchase price allocation or unaudited pro forma combined financial information for this transaction, given the short period of time between the acquisition date and the issuance of these consolidated financial statements.

In connection with the Asset Purchase, on July 26, 2021, the Company borrowed $1.0 billion in aggregate principal amount of term loans (the “Term Loans”) under the Term Loan Facility to finance a portion of the purchase price for the Asset Purchase and to pay fees and expenses incurred in connection therewith. Interest on the Term Loans is based on the applicable floating interest rate, plus an applicable margin based on the Company’s public debt credit ratings. The Term Loans mature on July 26, 2024, and all amounts then-outstanding under the Term Loans, together with accrued and unpaid interest thereon, are repayable at maturity. There is no premium or penalty for prepayment.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

This report and other documents we have filed with the SEC contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), and are subject to the “safe harbor” created by those sections. Words such as “anticipates,” “believes,” “continue,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “seek,” “should,” “will,” “would,” and similar expressions or variations or negatives of such words are intended to identify forward-looking statements but are not the exclusive means of identifying forward-looking statements in this report. Additionally, statements concerning future matters such as the possible impacts of geopolitical conflicts, inflation, and the COVID-19 pandemic, as well as the development of new products, enhancements of technologies, sales levels, expense levels, the benefits of acquisitions we have made or may make in the ~~acquisition of Silicon Labs’ Infrastructure and Automotive business,~~future, and other statements regarding matters that are not historical are forward-looking statements. Although forward-looking statements in this report reflect the good faith judgment of our management as of the date the statement is first made, such statements can only be based on facts and factors then known by us. Consequently, forward-looking statements involve inherent risks and uncertainties, and actual results and outcomes may differ materially and adversely from the results and outcomes discussed in, or anticipated by, the forward-looking statements. A number of important factors could cause actual results to differ materially and adversely from those in the forward-looking statements. We urge you to consider the risks and uncertainties discussed in this Quarterly Report on Form 10-Q and the ~~2020~~2021 10-K, under the heading “Risk Factors” and in the other documents we have filed with the SEC in evaluating our forward-looking statements. We have no plans, and undertake no obligation, to revise or update our forward-looking statements to reflect any event or circumstance that may arise after the date of the initial filing of this Quarterly Report on Form 10-Q. We caution readers not to place undue reliance upon any such forward-looking statements.

In this document, the words “we,” “our,” “ours,” and “us” refer only to Skyworks Solutions, Inc., and its subsidiaries and not any other person or entity.

Impact of COVID-19

The COVID-19 pandemic and the resulting economic downturn are affecting business conditions in our industry. The duration, severity, and future impact of the pandemic, including as a result of more contagious variants of the virus that causes COVID-19, continue to be highly uncertain and could still result in significant disruptions to our business operations, ~~including our supply chain,~~ as well as negative impacts to our financial condition. ~~A renewed suspension of our operations~~Like many companies in ~~Mexicali, Mexico, similar to what~~the semiconductor industry, we ~~experienced in April 2020, or a continued reduction in our production capacity~~are experiencing various supply constraints due to ~~employee quarantines, employee absenteeism,~~the pandemic. While we are working with our global supply chain partners to mitigate this risk, the duration and ~~restrictions on certain~~extent of ~~our employees’ ability to work, would negatively impact our future operating results.~~the supply chain disruptions remain uncertain.

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RESULTS OF OPERATIONS

Three and Nine Months Ended July 1, 2022, and July 2, 2021 ~~and June 26, 2020~~

The following table sets forth the results of our operations expressed as a percentage of net revenue:


		Three Months Ended				Nine Months Ended					Three Months Ended				Nine Months Ended
		July 2, 2021		June 26, 2020		July 2, 2021		June 26, 2020			July 1, 2022		July 2, 2021		July 1, 2022		July 2, 2021
Net revenue	Net revenue	100.0	%	100.0	%	100.0	%	100.0	%	Net revenue	100.0	%	100.0	%	100.0	%	100.0	%
Cost of goods sold	Cost of goods sold	50.0		54.7		50.0		51.9		Cost of goods sold	52.7		50.0		52.5		50.0
Gross profit	Gross profit	50.0		45.3		50.0		48.1		Gross profit	47.3		50.0		47.5		50.0
Operating expenses:	Operating expenses:									Operating expenses:
Research and development	Research and development	11.7		15.9		10.1		14.1		Research and development	12.7		11.7		11.5		10.1
Selling, general, and administrative	Selling, general, and administrative	7.6		7.5		5.8		7.0		Selling, general, and administrative	6.2		7.6		5.9		5.8
Amortization of intangibles	Amortization of intangibles	0.2		0.4		0.2		0.4		Amortization of intangibles	1.8		0.2		1.9		0.2
Restructuring, impairment, and other charges	Restructuring, impairment, and other charges	0.1		1.6		0.1		0.6		Restructuring, impairment, and other charges	0.2		0.1		0.2		0.1
Total operating expenses	Total operating expenses	19.6		25.4		16.2		22.1		Total operating expenses	20.9		19.6		19.5		16.2
Operating income	Operating income	30.4		19.9		33.8		26.0		Operating income	26.4		30.4		27.9		33.8
Interest expense	Interest expense	(0.2)		—		(0.1)		—		Interest expense	(0.9)		(0.2)		(0.8)		(0.1)
Other income (expense), net		(0.1)		(0.5)		—		—
Other expense, net										Other expense, net	—		(0.1)		—		—
Income before income taxes	Income before income taxes	30.1		19.4		33.7		26.0		Income before income taxes	25.5		30.1		27.1		33.7
Provision (benefit) for income taxes	Provision (benefit) for income taxes	(0.2)		1.9		2.8		2.4		Provision (benefit) for income taxes	3.8		(0.2)		3.2		2.8
Net income	Net income	30.3	%	17.5	%	30.9	%	23.6	%	Net income	21.7	%	30.3	%	23.9	%	30.9	%

OVERVIEW

We, together with our consolidated subsidiaries, are empowering the wireless networking revolution. Our highly innovative analog semiconductors are connecting people, places, and things spanning a number of new and previously unimagined applications within the aerospace, automotive, broadband, cellular infrastructure, connected home, entertainment and gaming, industrial, medical, military, smartphone, tablet, and wearable markets.

General

During the ~~nine~~three months ended July ~~2, 2021,~~1, 2022, the following key factors contributed to our overall results of operations, financial position, and cash flows:

•Net revenue increased ~~by 58.3%~~ to ~~$3,798.2~~$1,232.6 million for the ~~nine~~three months ended July ~~2, 2021,~~1, 2022, as compared ~~with~~to $1,116.4 million for the corresponding period in fiscal ~~2020. This~~2021, driven primarily by our prior year fourth quarter acquisition to support high-growth market segments, such as automotive including electric and hybrid vehicles, industrial and motor control, power supply, 5G wireless infrastructure, optical data communication and data center, and smart home. The increase in net revenue was also driven ~~primarily~~in part by an increase in ~~overall~~ demand for next-generation wireless connectivity products, ~~coupled with the onset of technology upgrade cycles,~~ including ~~for~~ 5G and advanced Wi-Fi ~~6 solutions. Additionally, our~~solutions, from major OEMs and the associated increases in average content per device for these ~~next-generation solutions increased.~~products, offset by a decrease in demand for our mobile products from smartphone customers in China.

•Our ending cash, cash equivalents, and marketable securities balance ~~increased 203.9%~~decreased to ~~$2,978.1 million as of July 2, 2021, from $980.0 million as of October 2, 2020.~~$662.2 million. The ~~increase~~decrease in cash, cash equivalents, and marketable securities during the ~~nine~~three months ended July ~~2, 2021,~~1, 2022, was primarily due to the issuance of $500.0 million of Senior Notes due 2023 (the “2023 Notes”), $500.0 million of Senior Notes due 2026 (the “2026 Notes”), and $500.0 million of Senior Notes due 2031 (the “2031 Notes” and, together with the 2023 Notes and the 2026 Notes, the “Notes”) in order to fund the anticipated Asset Purchase. The remaining increase was primarily the result of cash generated from operations of $1,373.7 million, partially offset by capital expenditures of $374.8 million, the repurchase of ~~1.4~~1.0 million shares of common stock for ~~$195.6~~$119.1 million, capital expenditures of $125.1 million, and dividend payments of ~~$248.1~~$90.0 million, partially offset by cash generated from operations of $213.9 million.

~~Net Revenue~~

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Three Months Ended Nine Months Ended
July 2,
2021 Change June 26,
2020 July 2,
2021 Change June 26,
2020
(dollars in millions)
Net revenue $ 1,116.4 51.5% $ 736.8 $ 3,798.2 58.3% $ 2,398.9
Net Revenue


	Three Months Ended					Nine Months Ended
	July 1, 2022		Change	July 2, 2021		July 1, 2022		Change	July 2, 2021
(dollars in millions)
Net revenue	$	1,232.6	10.4%	$	1,116.4	$	4,078.6	7.4%	$	3,798.2

We market and sell our products directly to OEMs of communications and electronics products, third-party original design manufacturers and contract manufacturers, and indirectly through electronic components distributors. We generally experience seasonal peaks during our fourth and first fiscal quarters (which correspond to the second half of the calendar year), primarily as a result of increased worldwide production of consumer electronics in anticipation of increased holiday sales, whereas our second and third fiscal quarters are typically lower and in line with seasonal industry trends.

The increase in net revenue for the three and nine months ended July ~~2, 2021,~~1, 2022, as compared with the corresponding ~~period~~periods in fiscal ~~2020,~~2021, was driven primarily by our prior year fourth quarter acquisition to support high-growth market segments, such as automotive including electric and hybrid vehicles, industrial and motor control, power supply, 5G wireless infrastructure, optical data communication and data center, and smart home. The increase in net revenue was also driven in part by an increase in ~~overall~~ demand for next-generation wireless connectivity products, ~~coupled with the onset of technology upgrade cycles,~~ including ~~for~~ 5G and advanced Wi-Fi ~~6 solutions. Additionally, our~~solutions, from major OEMs and the associated increases in average content per device for these ~~next-generation solutions increased.~~products, offset by a decrease in demand for our mobile products from smartphone customers in China.

Gross Profit

Three Months Ended Nine Months Ended
July 2,
2021 Change June 26,
2020 July 2,
2021 Change June 26,
2020
(dollars in millions)
Gross profit $ 558.6 67.2% $ 334.1 $ 1,898.7 64.5% $ 1,154.0
% of net revenue 50.0 % 45.3 % 50.0 % 48.1 %


	Three Months Ended							Nine Months Ended
	July 1, 2022			Change	July 2, 2021			July 1, 2022			Change	July 2, 2021
(dollars in millions)
Gross profit	$	583.3		4.4%	$	558.6		$	1,935.7		1.9%	$	1,898.7
% of net revenue	47.3		%		50.0		%	47.5		%		50.0		%

Gross profit represents net revenue less cost of goods sold. Our cost of goods sold consists primarily of purchased materials, labor, and overhead (including depreciation, ~~and~~ share-based compensation, and amortization of acquisition intangibles, including inventory step-up expense) associated with product manufacturing. ~~Erosion of average selling prices of established products is typical of the semiconductor industry.~~ As part of our normal course of business, we ~~mitigate the~~intend to improve gross ~~margin impact of declining average selling prices~~profit with efforts to increase unit volumes, ~~reduce material costs,~~ improve manufacturing efficiencies, lower manufacturing costs of existing products, and by introducing new and higher value-added products.

The increase in gross profit for the three and nine months ended July ~~2, 2021,~~1, 2022, as compared with the corresponding ~~period~~periods in fiscal ~~2020,~~2021, was primarily the result of a favorable product mix ~~and higher unit volumes~~including volume increases for new product introductions with a gross profit impact of ~~$197.9~~$105.6 million and $326.3 million, respectively, partially offset by lower ~~average selling prices. In addition, there was a $23.4 million production utilization charge~~comparable unit volumes and an increase in ~~the three months ended June 26, 2020,~~amortization of acquisition intangibles, including inventory step-up, due to additional intangible assets acquired during the ~~temporary suspension~~fourth quarter of our operations in Mexicali in the government's effort to contain the COVID-19 pandemic. Gross profit margin increased to 50.0% of net revenue for the three months ended July 2, 2021, as compared with 45.3% in the corresponding period in fiscal ~~2020.~~

The increase in gross profit for the nine months ended July 2, 2021, as compared with the corresponding period in fiscal 2020, was primarily the result of a favorable product mix and higher unit volumes with a gross profit impact of $766.0 million, partially offset by lower average selling prices. In addition, there was a $23.4 million production utilization charge in the nine months ended June 26, 2020, due to the temporary suspension of our operations in Mexicali in the government's effort to contain the COVID-19 pandemic. Gross profit margin increased to 50.0% of net revenue for the nine months ended July 2, 2021, as compared with 48.1% in the corresponding period in fiscal 2020.2021.

Research and Development

Three Months Ended Nine Months Ended
July 2,
2021 Change June 26,
2020 July 2,
2021 Change June 26,
2020
(dollars in millions)
Research and development $ 130.8 11.8 % $ 117.0 $ 383.1 13.4 % $ 337.9
% of net revenue 11.7 % 15.9 % 10.1 % 14.1 %


	Three Months Ended								Nine Months Ended
	July 1, 2022			Change		July 2, 2021			July 1, 2022			Change		July 2, 2021
(dollars in millions)
Research and development	$	156.5		19.6	%	$	130.8		$	468.4		22.3	%	$	383.1
% of net revenue	12.7		%			11.7		%	11.5		%			10.1		%

Research and development expenses consist primarily of direct personnel costs including share-based compensation expense, costs for pre-production evaluation, and testing of new devices, masks, engineering prototypes, and design tool costs.

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The increase in research and development expenses for the three and nine months ended July ~~2, 2021,~~1, 2022, as compared with the corresponding periods in fiscal ~~2020,~~2021, was primarily related to headcount-related expenses, including share-based compensation, as a result of our increased investment in developing new technologies and products. The increase in headcount was partially due to our acquisition in the fourth quarter of fiscal 2021.

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Selling, General, and Administrative

Three Months Ended Nine Months Ended
July 2,
2021 Change June 26,
2020 July 2,
2021 Change June 26,
2020
(dollars in millions)
Selling, general, and administrative $ 85.1 54.7 % $ 55.0 $ 222.0 31.3 % $ 169.1
% of net revenue 7.6 % 7.5 % 5.8 % 7.0 %


	Three Months Ended								Nine Months Ended
	July 1, 2022			Change		July 2, 2021			July 1, 2022			Change		July 2, 2021
(dollars in millions)
Selling, general, and administrative	$	77.0		(9.5)	%	$	85.1		$	242.1		9.1	%	$	222.0
% of net revenue	6.2		%			7.6		%	5.9		%			5.8		%

Selling, general, and administrative expenses include legal and related costs, accounting, treasury, human resources, information systems, customer service, bad debt expense, sales commissions, share-based compensation expense, advertising, marketing, costs associated with business combinations completed or contemplated during the period, and other costs.

The decrease in selling, general, and administrative expenses for the three months ended July 1, 2022, as compared with the corresponding period in fiscal 2021, was primarily related to a decrease in costs associated with our acquisition in the fourth quarter of fiscal 2021.

The increase in selling, general, and administrative expenses for the ~~three and~~ nine months ended July ~~2, 2021,~~1, 2022, as compared with the corresponding ~~periods~~period in fiscal ~~2020,~~2021, was primarily related to increases in ~~costs associated with business combinations contemplated during the period and increases in employee-related compensation expense,~~headcount-related expenses, including share-based ~~compensation expense.~~compensation. The increase in headcount was primarily due to our acquisition in the fourth quarter of fiscal 2021.

Amortization of Intangibles

Three Months Ended Nine Months Ended
July 2,
2021 Change June 26,
2020 July 2,
2021 Change June 26,
2020
(dollars in millions)
Amortization of intangibles $ 2.4 (14.9) % $ 2.8 $ 7.9 (11.9) % $ 9.0
% of net revenue 0.2 % 0.4 % 0.2 % 0.4 %


	Three Months Ended								Nine Months Ended
	July 1, 2022			Change		July 2, 2021			July 1, 2022			Change		July 2, 2021
(dollars in millions)
Amortization of intangibles	$	21.9		812.5	%	$	2.4		$	77.0		874.7	%	$	7.9
% of net revenue	1.8		%			0.2		%	1.9		%			0.2		%

The ~~decrease~~increase in amortization expense for the three and nine months ended July ~~2, 2021,~~1, 2022, as compared with the corresponding periods in fiscal ~~2020,~~2021, was primarily due to the ~~end of the useful lives of certain~~ intangible assets ~~that were~~ acquired ~~in prior~~during the fourth quarter of fiscal ~~years.~~2021.

Interest Expense

Three Months Ended Nine Months Ended
July 2,
2021 Change June 26,
2020 July 2,
2021 Change June 26,
2020
(dollars in millions)
Interest expense $ (2.6) 100.0 % $ 0 $ (2.6) 100.0 % $ 0
% of net revenue (0.2) % — % (0.1) % — %


	Three Months Ended								Nine Months Ended
	July 1, 2022			Change		July 2, 2021			July 1, 2022			Change		July 2, 2021
(dollars in millions)
Interest expense	$	(11.3)		334.6	%	$	(2.6)		$	(33.6)		1,192.3	%	$	(2.6)
% of net revenue	(0.9)		%			(0.2)		%	(0.8)		%			(0.1)		%

The increase in interest expense for the three and nine months ended July ~~2, 2021,~~1, 2022, as compared with the corresponding periods in fiscal ~~2020,~~2021, was due to the issuance of the Notes (as defined below) in May 2021 and the borrowing of the Term Loans (as defined below) in July 2021.

Provision for Income Taxes

Three Months Ended Nine Months Ended
July 2,
2021 Change June 26,
2020 July 2,
2021 Change June 26,
2020
(dollars in millions)
Provision (benefit) for income taxes $ (1.6) (111.2) % $ 14.3 $ 110.5 91.4 % $ 57.7
% of net revenue (0.2) % 1.9 % 2.8 % 2.4 %


	Three Months Ended								Nine Months Ended
	July 1, 2022			Change		July 2, 2021			July 1, 2022			Change		July 2, 2021
(dollars in millions)
Provision (benefit) for income taxes	$	46.8		(3,025.0)	%	$	(1.6)		$	131.4		18.9	%	$	110.5
% of net revenue	3.8		%			(0.2)		%	3.2		%			2.8		%

We recorded a ~~benefit~~provision for income taxes of ~~$1.6~~$46.8 million (which consisted of ~~a benefit of $13.8~~$35.8 million and ~~a provision of $12.2~~$11.0 million related to United States and foreign income taxes, respectively) and ~~a provision of $110.5~~$131.4 million (which consisted

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~~of $63.7~~$88.5 million and ~~$46.8~~$42.9 million related to United States and foreign income taxes, respectively) for the three and nine months ended July ~~2, 2021,~~1, 2022, respectively.

~~During fiscal 2021, we concluded an IRS examination~~

Table of ~~our federal~~Contents

The increase in income tax ~~returns~~expense for fiscal 2015 and 2016. With the conclusion of the audit, we decreased the reserve for uncertain tax positions, which resulted in the recognition of an income tax benefit of $42.8 million and $34.8 million during the three and nine months ended July ~~2, 2021, respectively.~~

~~The decrease in income tax expense for the three months ended July 2, 2021,~~1, 2022, as compared with the corresponding periods in fiscal ~~2020,~~2021, was primarily due to a prior period decrease in the reserve for uncertain tax positions, partially offset by ~~increased~~a decrease in income from operations ~~a reduction~~and an increase in ~~the relative amount of benefits related to foreign income taxed at rates lower than the federal statutory rate, and a reduction in the relative amount of~~ windfall tax deductions ~~as compared to income from operations.~~

The increase in income tax expense for the nine months ended July 2, 2021, as compared with the corresponding periods in fiscal 2020, was primarily due to increased income from operations, a reduction in the relative amount of benefits related to foreign income taxed at rates lower than the federal statutory rate, and a reduction in the relative amount of windfall tax deductions as compared to income from operations, partially offset by a decrease in the reserve for uncertain tax positions.current period.

LIQUIDITY AND CAPITAL RESOURCES


		Nine Months Ended					Nine Months Ended
(in millions)	(in millions)	July 2, 2021		June 26, 2020		(in millions)	July 1, 2022		July 2, 2021
Cash and cash equivalents at beginning of period	Cash and cash equivalents at beginning of period	$	566.7	$	851.3	Cash and cash equivalents at beginning of period	$	882.9	$	566.7
Net cash provided by operating activities	Net cash provided by operating activities	1,373.7		937.5		Net cash provided by operating activities	1,188.3		1,373.7
Net cash used in investing activities	Net cash used in investing activities	(101.0)		(391.0)		Net cash used in investing activities	(231.6)		(101.0)
Net cash provided by (used in) financing activities	Net cash provided by (used in) financing activities	1,005.6		(606.5)		Net cash provided by (used in) financing activities	(1,196.6)		1,005.6
Cash and cash equivalents at end of period	Cash and cash equivalents at end of period	$	2,845.0	$	791.3	Cash and cash equivalents at end of period	$	643.0	$	2,845.0

Cash provided by operating activities:

Cash provided by operating activities consists of net income for the period adjusted for certain non-cash items and changes in certain operating assets and liabilities. The ~~$436.2~~$185.4 million ~~increase~~decrease in cash provided by operating activities during the nine months ended July ~~2, 2021,~~1, 2022, as compared with the corresponding period in fiscal ~~2020,~~2021, was primarily related to ~~a $604.1 million increase in net income, partially offset by $178.5 million of~~ unfavorable changes in working capital of $272.9 million, due primarily to ~~an increase~~increases in ~~net~~inventory and cash ~~outflows for accounts receivable which correlates~~deposits with ~~higher sales during the period.~~suppliers.

Cash used in investing activities:

Cash used in investing activities consists primarily of capital expenditures and cash paid related to the purchase of marketable securities, offset by cash received related to the sale or maturity of marketable securities. The ~~$290.0~~$130.6 million ~~decrease~~increase in cash used in investing activities during the nine months ended July ~~2, 2021,~~1, 2022, as compared with the corresponding period in fiscal ~~2020,~~2021, was primarily related to a ~~$421.1~~$156.4 million ~~increase~~decrease in the net ~~sale~~sales of marketable securities, partially offset by a ~~$131.3~~$27.1 million ~~increase~~decrease in cash used for capital expenditures.

Cash provided by (used in) financing activities:

Cash ~~provided by~~used in financing activities consists primarily of proceeds and payments related to our long-term borrowings and cash transactions related to equity. The ~~$1,612.1~~$2,202.2 million ~~net~~ increase in cash ~~provided by~~used in financing activities during the nine months ended July ~~2, 2021,~~1, 2022, as compared with the corresponding period in fiscal ~~2020,~~2021, was primarily related to a decrease of $1,490.0 million in cash provided by long-term borrowings, an increase of ~~$1,489.7 million in long-term debt issued and a decrease of $220.9~~$610.9 million in stock repurchase activity, ~~partially offset by~~a $50.0 million repayment of Term Loans, an increase of ~~$24.6 million in dividend payments, a decrease of $44.4 million in net proceeds from employee stock option exercises, and an increase of $22.7~~$31.6 million related to the minimum statutory payroll tax withholdings upon vesting of employee performance and restricted stock ~~awards.~~awards, and an increase of $25.6 million in dividend payments.

Liquidity:

Cash, cash equivalents, and marketable securities totaled ~~$2,978.1~~$662.2 million as of July ~~2, 2021,~~1, 2022, representing ~~an increase~~a decrease of ~~$1,998.1~~$365.0 million from October ~~2, 2020.~~1, 2021. The ~~increase~~decrease during the nine months ended July 1, 2022, resulted primarily from ~~$1,489.7~~the repurchase of 5.7 million ~~in long-term debt issued, $1,373.7~~shares of common stock for $806.5 million, incapital expenditures of $347.7 million, and dividend payments of $273.7 million, partially offset by cash generated from operations ~~partially offset by $374.8 million in capital expenditures, $195.6 million used to repurchase 1.4 million shares~~ of ~~stock, and $248.1 million in cash dividend payments.~~$1,188.3 million.

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We have outstanding ~~$500~~$500.0 million of Notes Due 2023, ~~$500~~$500.0 million of Notes Due 2026, and ~~$500~~$500.0 million of Notes Due ~~2031.~~2031 (the “Notes”). We have ~~a Revolving Credit Agreement (the “Revolving Credit Agreement”)~~under which we may borrow up to $750 million for general corporate purposes and working capital needs of the Company and its subsidiaries. As of July 2, 2021, there were no borrowings outstanding under the revolving credit facility (the “Revolver”). The Revolving Credit Agreement expires July 26, 2026. On May 21, 2021, we entered into a term credit agreement (the “Term Credit Agreement”) providing for a $1.0 billion term loan facility (the “Term Loan Facility”). ~~As of July 2, 2021, there were no borrowings outstanding under the Term Credit Agreement.~~ On July 26, 2021, wethe Company borrowed $1.0 billion in aggregate principal amount of term loans (the “Term Loans”) under the Term Loan Facility to finance a portion of the purchase price ~~for~~to acquire the ~~Asset Purchase~~Infrastructure and Automotive business of Silicon Laboratories Inc. and to pay fees and expenses incurred in connection therewith. During the nine months ended July 1, 2022, we repaid $50.0 million of outstanding borrowings under the Term Loans. As of July 1, 2022, there were $700.0 million of borrowings outstanding under the Term Credit Agreement. We have a Revolving Credit Agreement (the “Revolving Credit Agreement”) under which we may borrow up to $750.0 million for general corporate purposes and working capital needs of the Company and its subsidiaries. As of July 1, 2022, there were no borrowings outstanding under the revolving credit facility (the “Revolver”). The Revolving Credit Agreement expires July 26, 2026.

Based on our historical results of operations, we expect that our cash, cash equivalents, and marketable securities on hand, the cash we expect to generate from operations, ~~proceeds from the Term Loan Facility,~~ and funds from our Revolver, will be sufficient to fund our short-term and long-term liquidity requirements primarily arising from: research and development, capital expenditures, potential acquisitions, working

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capital, quarterly cash dividend payments (if such dividends are declared by the Board of Directors), outstanding commitments, and other liquidity requirements associated with existing ~~operations for at least the next 12 months.~~operations. However, we cannot be certain that our cash on hand, cash generated from operations, and funds from our Revolver will be available in the future to fund all of our capital and operating requirements. In addition, any future strategic investments and significant acquisitions may require additional cash and capital resources. If we are unable to obtain sufficient cash or capital to meet our needs on a timely basis and on favorable terms, our business and operations could be materially and adversely affected.

Our invested cash balances primarily consist of highly liquid marketable securities that are available to meet near-term cash requirements including: term deposits, certificates of ~~deposits,~~deposit, money market funds, U.S. Treasury securities, agency securities, corporate debt securities, and commercial paper.

We are exposed to interest rate risk via the terms of our Revolver and Term Loan Facility, which have variable interest rates. See Note 13 of the Notes to Consolidated Financial Statements for further information. A potential change in the associated interest rates would be immaterial to the results of our operations.

~~CONTRACTUAL OBLIGATIONS~~

~~Except for the issuance of our Notes, our~~Our contractual obligations disclosure in the ~~2020~~2021 10-K has not materially changed since we filed that report. ~~Refer to Note 13 of the Notes to Consolidated Financial Statements for further information.~~

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

We are subject to overall financial market risks, such as changes in market liquidity, credit quality, investment risk, interest rate risk, and foreign exchange rate risk as described below.

Investment and Interest Rate Risk

Our exposure to interest rate and general market risks relates ~~principally~~ to our Term Credit Facility, which has variable interest rates, and our investment portfolio. As of July 1, 2022, there were $700.0 million of borrowings outstanding under the Term Credit Agreement, and a potential change in the associated interest rates would be immaterial to the results of our operations. Our investment portfolio ~~which~~ consists of cash and cash equivalents (money market funds and marketable securities purchased with less than ninety days until maturity) that total approximately ~~$2,845.0~~$643.0 million, and marketable securities (U.S. Treasury and government securities, corporate bonds and notes, and municipal bonds) that total approximately ~~$129.2~~$16.2 million and ~~$3.9~~$3.0 million within short-term and long-term marketable securities, respectively, as of July ~~2, 2021.~~1, 2022.

The main objectives of our investment activities are liquidity and preservation of capital. Our cash equivalent investments have short-term maturity periods that dampen the impact of market or interest rate risk. Our marketable securities consist of short-term and long-term maturity periods between 90 days and two years. Credit risk associated with our investments is not material because our investments are diversified across several types of securities with high credit ratings, which reduces the amount of credit exposure to any one investment.

Based on our results of operations for the three and nine months ended July ~~2, 2021,~~1, 2022, a hypothetical reduction in the interest rates on our cash, cash equivalents, and other investments to zero would result in an immaterial reduction of interest income with a de minimis impact on income before taxes.

Given the low interest rate environment, the objectives of our investment activities, and the relatively low interest income generated from our cash, cash equivalents, and other investments, we do not believe that investment or interest rate risks currently pose material exposures to our business or results of operations.

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Foreign Exchange Rate Risk

Substantially all sales to customers and arrangements with third-party manufacturers provide for pricing and payment in United States dollars, thereby reducing the impact of foreign exchange rate fluctuations on our results. A percentage of our international operational expenses are denominated in foreign currencies, and exchange rate volatility could positively or negatively impact those operating costs. Increases in the value of the United States dollar relative to other currencies could make our products more expensive, which could negatively impact our ability to compete. Conversely, decreases in the value of the United States dollar relative to other currencies could result in our suppliers raising their prices to continue doing business with us. Given the relatively small number of customers and arrangements with third-party manufacturers denominated in foreign currencies, we do not believe that foreign exchange volatility has a material impact on our current business or results of operations. However, fluctuations in currency exchange rates could have a greater effect on our business or results of operations in the future to the extent our expenses increasingly become denominated in foreign currencies.

We may enter into foreign currency forward and options contracts with financial institutions to protect against foreign exchange risks associated with certain existing assets and liabilities, certain firmly committed transactions, forecasted future cash flows, and net investments in foreign subsidiaries. However, we may choose not to hedge certain foreign exchange exposures for a variety of reasons, including, but not limited to, accounting considerations and the prohibitive economic cost of hedging particular exposures.

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For the three and nine months ended July ~~2, 2021,~~1, 2022, we had no outstanding foreign currency forward or options contracts with financial institutions.

ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures as of July ~~2, 2021.~~1, 2022. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well-designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on management’s evaluation of our disclosure controls and procedures as of July ~~2, 2021,~~1, 2022, our chief executive officer and chief financial officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control Over Financial Reporting

There are no changes to our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that occurred during the third quarter of fiscal ~~2021~~2022 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

~~From time~~Refer to ~~time, various lawsuits, claims, and proceedings have been, and may in~~Note 9 of the ~~future be, instituted or asserted against the Company, including those pertaining~~Notes to ~~patent infringement, intellectual property, environmental hazards, product liability and warranty, safety and health, employment, and contractual matters.~~

The semiconductor industry is characterized by vigorous protection and pursuit of intellectual property rights. From time to time, third parties have asserted and may in the future assert patent, copyright, trademark, and other intellectual property rights to technologies that are important to the Company’s business and have demanded and may in the future demand that the Company license their technology. The outcome of any such litigation cannot be predicted with certainty and some such lawsuits, claims, or proceedings may be disposed of unfavorably to the Company. Generally speaking, intellectual property disputes often haveConsolidated Financial Statements for a risk of injunctive relief, which, if imposed against the Company, could materially and adversely affect the Company’s financial condition or results of operations. From time to time the Company may also be involved in legal proceedings in the ordinary course of business.

ITEM 1A. RISK FACTORS.

In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the factors discussed in Part I, Item 1A Risk Factors in the ~~2020~~2021 10-K, which could materially affect our business, financial condition, or future results.

~~Risks Related to the Acquisition of the Infrastructure and Automotive Business of Silicon Labs~~

~~We may not achieve the anticipated benefits of the acquisition of the Infrastructure and Automotive business of Silicon Labs.~~

On July 26, 2021, the Company completed the acquisition of certain assets, rights, and properties, and assumed certain liabilities, comprising Silicon Labs’ Infrastructure and Automotive business (the “Acquisition”).

Achieving the anticipated benefits of the Acquisition is subject to a number of uncertainties, including the Company’s ability to successfully integrate the assets acquired and employees transferred in connection with the Acquisition. Failure to achieve the anticipated benefits of the Acquisition in the expected timeframe or at all could result in increased costs and diversion of management’s time and energy and could materially adversely affect our business, financial condition, and results of operations.

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~~We incurred significant indebtedness in connection with the Acquisition, which could reduce our flexibility to operate our business.~~

On May 21, 2021, the Company, as borrower, entered into a term credit agreement with various financial institutions, as lenders, and JPMorgan Chase Bank, N.A., as administrative agent, providing for a $1.0 billion Term Loan Facility. Additionally, on May 26, 2021, the Company issued $500 million of its 0.900% 2023 Notes, $500 million of its 1.800% 2026 Notes, and $500 million of its 3.000% 2031 Notes in a public offering. The proceeds of the Term Loan Facility and the issuance of Notes were used to finance a portion of the purchase price for the Acquisition.

Additionally, on May 21, 2021, the Company entered into the Revolving Credit Agreement with various financial institutions, as lenders, and JPMorgan Chase Bank, N.A., as administrative agent, providing for a $750 million Revolver. Borrowings under the Revolving Credit Facility will be used for general corporate purposes and working capital needs of the Company and its subsidiaries.

This indebtedness could have the effect, among other things, of reducing our flexibility to respond to changing business and economic conditions. We also have incurred, and will continue to incur, various costs and expenses associated with our indebtedness. Our ability to make payments of principal and interest on our indebtedness when due depends upon our future performance, which will be subject to general economic conditions, industry cycles, and financial, business, and other factors affecting our operations, many of which are beyond our control. The incurrence of this or any additional indebtedness could reduce funds available for working capital, capital expenditures, acquisitions, and other general corporate purposes and may create competitive disadvantages relative to other companies with lower debt levels. Further, if we do not achieve the anticipated benefits from the Acquisition, our ability to service our indebtedness may be adversely impacted. Even if we achieve the anticipated benefits from the Acquisition, we may be required to raise substantial additional financing to fund working capital, capital expenditures, acquisitions, or other general corporate purposes. Our ability to arrange additional financing and make payments of principal and interest on our indebtedness will depend on our future performance, which will be subject to general economic, financial, and business conditions as well as other factors affecting our operations, many of which are beyond our control.

In addition, our credit ratings affect the cost and availability of future borrowings and, accordingly, our cost of capital. Our ratings reflect each rating organization’s opinion of our financial strength, operating performance, and ability to meet our debt obligations. There can be no assurance that we will achieve a particular rating or maintain a particular rating in the future. An inability to obtain or maintain a rating could increase the cost of future borrowings or refinancings of our indebtedness, limit our access to sources of financing in the future, or lead to other potentially adverse consequences.

~~The agreements that govern our indebtedness contain various covenants that impose restrictions that may affect our ability to operate our businesses.~~

The agreements that govern the Term Loan Facility, the Notes, and the Revolver contain various affirmative and negative covenants that, subject to certain significant exceptions, restrict our ability to, among other things, have liens on our property, change the nature of our business, and/or merge or consolidate with any other person or sell or convey certain assets to any one person. In addition, some of the agreements contain a financial covenant consisting of a limitation on leverage. Our ability to comply with these provisions may be affected by events beyond our control. Failure to comply with these covenants could result in an event of default, which, if not cured or waived, could accelerate our repayment obligations. Any such acceleration of our repayment obligations could have a material adverse effect on our business, financial condition, results of operations, cash flows, and/or stock price.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

The following table provides information regarding repurchases of common stock made during the three months ended July ~~2, 2021:~~1, 2022:

Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1)
04/3/21-04/30/21 2,200 (2) $188.73 — $2.0 billion
05/1/21-05/28/21 10,469 (2) $164.16 — $2.0 billion
05/29/21-07/2/21 448 (2) $173.23 — $2.0 billion
Total 13,117 —


Period	Total Number of Shares Purchased		Average Price Paid per Share	Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1)
04/02/22 - 04/29/22	754,212	(2)	$124.90	750,000	$1.2 billion
04/30/22 - 05/27/22	256,907	(3)	$101.57	250,000	$1.2 billion
05/28/22 - 07/01/22	3,685	(4)	$107.27	—	$1.2 billion
Total	1,014,804			1,000,000

~~Table of Contents~~

(1) ~~We announced on January 28, 2021, that our~~The stock repurchase program approved by the Board of Directors ~~had approved a stock repurchase program~~ on January 26, 2021, ~~which~~ authorizes the repurchase of up to ~~$2.0~~$2.0 billion of our common stock from time to time on the open market or in privately negotiated transactions as permitted by securities laws and other legal requirements, and ~~which expires~~is scheduled to expire on January 26, 2023.

(2) 750,000 shares were repurchased at an average price of $124.92 per share as part of our stock repurchase program, and 4,212 shares were repurchased by us at the fair market value of the common stock as of the applicable purchase date, in connection with the satisfaction of tax withholding obligations under equity award agreements with an average price of $122.92 per share.

(3) 250,000 shares were repurchased at an average price of $101.52 per share as part of our stock repurchase program, and 6,907 shares were repurchased by us at the fair market value of the common stock as of the applicable purchase date, in connection with the satisfaction of tax withholding obligations under equity award agreements with an average price of $103.48 per share.

(4) Represents shares repurchased by us at the fair market value of the common stock as of the applicable purchase date, in connection with the satisfaction of tax withholding obligations under equity award agreements.

2622

Table of Contents

ITEM 6. EXHIBITS.

Exhibit
Number
Exhibit Description Form Incorporated by Reference Filed Herewith
File No. Exhibit Filing Date
2.1
Asset Purchase Agreement, dated as of April 22, 2021, by and between Skyworks Solutions, Inc., and Silicon Laboratories Inc.**
8-K 001-05560 2.1 4/22/2021
4.1
Indenture, dated as of May 26, 2021, by and between the Company and U.S. Bank National Association
8-K 001-05560 4.1 5/26/2021
4.2
First Supplemental Indenture, dated as of May 26, 2021, by and between the Company and U.S. Bank National Association
8-K 001-05560 4.2 5/26/2021
4.3
Second Supplemental Indenture, dated as of May 26, 2021, by and between the Company and U.S. Bank National Association
8-K 001-05560 4.3 5/26/2021
4.4
Third Supplemental Indenture, dated as of May 26, 2021, by and between the Company and U.S. Bank National Association
8-K 001-05560 4.4 5/26/2021
10.1
Debt Commitment Letter, dated as of April 22, 2021, by and between Skyworks Solutions, Inc., and JPMorgan Chase Bank, N.A.
8-K 001-05560 10.1 4/22/2021
10.2
Skyworks Solutions, Inc. Amended and Restated 2015 Long-Term Incentive Plan*
X
10.3
Term Credit Agreement, dated as of May 21, 2021, among the Company, the lenders party thereto and JPMorgan Chase Bank, N.A., as the administrative agent**
8-K 001-05560 10.1 5/26/2021
10.4
Revolving Credit Agreement, dated as of May 21, 2021, among the Company, the Borrowing Subsidiaries party thereto, the lenders party thereto and JPMorgan Chase Bank, N.A., as the administrative agent**
8-K 001-05560 10.2 5/26/2021
31.1
Certification of the Company’s Chief Executive Officer pursuant to Securities Exchange Act of 1934, as amended, Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
X
31.2
Certification of the Company’s Chief Financial Officer pursuant to Securities Exchange Act of 1934, as amended, Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
X
32.1
Certification of the Company’s Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
X
32.2
Certification of the Company’s Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
X

~~Table of Contents~~

Exhibit

Number

Exhibit Description

Form

Incorporated by Reference

Filed Herewith

File No.

Exhibit

Filing Date

31.1

Certification of the Company’s Chief Executive Officer pursuant to Securities Exchange Act of 1934, as amended, Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2

Certification of the Company’s Chief Financial Officer pursuant to Securities Exchange Act of 1934, as amended, Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1

Certification of the Company’s Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2

Certification of the Company’s Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS

Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH

Inline XBRL Taxonomy Extension Schema Document

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document

104

Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101)

* Indicates a management contract or compensatory plan or arrangement.

**Schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company will furnish the omitted schedules and exhibits to the Securities and Exchange Commission upon request.

2823

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



		SKYWORKS SOLUTIONS, INC.

Date:	~~July 29, 2021~~August 4, 2022	By:	/s/ Liam K. Griffin
			Liam K. Griffin
			Chairman, Chief Executive Officer and President
			(Principal Executive Officer)

		By:	/s/ Kris Sennesael
			Kris Sennesael
			Senior Vice President and Chief Financial Officer
			(Principal Accounting and Financial Officer)

2924


			PAGE NO.
PART I. FINANCIAL INFORMATION

ITEM 1: FINANCIAL STATEMENTS (UNAUDITED)			2

CONSOLIDATED STATEMENTS OF OPERATIONS			2

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME			3

CONSOLIDATED BALANCE SHEETS			4

CONSOLIDATED STATEMENTS OF CASH FLOWS			5

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY			6

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS			8

ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			1715

ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK			2220

ITEM 4: CONTROLS AND PROCEDURES			2321

PART II. OTHER INFORMATION			2422

ITEM 1: LEGAL PROCEEDINGS			2422

ITEM 1A: RISK FACTORS			2422

ITEM 2: UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS			2522

ITEM 6: EXHIBITS			2723

SIGNATURES			2924


	Remaining 2021		2022		2023		2024		2025		Thereafter
Amortization expense, cost of goods sold	$	1.3	$	5.4	$	5.4	$	1.9	$	0.1	$	1.7
Amortization expense, operating expense	$	3.5	$	6.2	$	1.8	$	1.4	$	1.1	$	1.1
Total amortization expense	$	4.8	$	11.6	$	7.2	$	3.3	$	1.2	$	2.8


			As of
	Effective Interest Rate		July 2, 2021		October 2, 2020
0.90% Senior Notes due 2023	1.15	%	$	500.0	$	0
1.80% Senior Notes due 2026	1.97	%	500.0		0
3.00% Senior Notes due 2031	3.13	%	500.0		0
Unamortized debt discount and issuance costs			(12.9)		0
Total debt			$	1,487.1	$	0


Exhibit Number	Exhibit Description	Form	Incorporated by Reference			Filed Herewith
			File No.	Exhibit	Filing Date


2.1	Asset Purchase Agreement, dated as of April 22, 2021, by and between Skyworks Solutions, Inc., and Silicon Laboratories Inc.**	8-K	001-05560	2.1	4/22/2021

4.1	Indenture, dated as of May 26, 2021, by and between the Company and U.S. Bank National Association	8-K	001-05560	4.1	5/26/2021

4.2	First Supplemental Indenture, dated as of May 26, 2021, by and between the Company and U.S. Bank National Association	8-K	001-05560	4.2	5/26/2021

4.3	Second Supplemental Indenture, dated as of May 26, 2021, by and between the Company and U.S. Bank National Association	8-K	001-05560	4.3	5/26/2021

4.4	Third Supplemental Indenture, dated as of May 26, 2021, by and between the Company and U.S. Bank National Association	8-K	001-05560	4.4	5/26/2021

10.1	Debt Commitment Letter, dated as of April 22, 2021, by and between Skyworks Solutions, Inc., and JPMorgan Chase Bank, N.A.	8-K	001-05560	10.1	4/22/2021

10.2	Skyworks Solutions, Inc. Amended and Restated 2015 Long-Term Incentive Plan*					X

10.3	Term Credit Agreement, dated as of May 21, 2021, among the Company, the lenders party thereto and JPMorgan Chase Bank, N.A., as the administrative agent**	8-K	001-05560	10.1	5/26/2021

10.4	Revolving Credit Agreement, dated as of May 21, 2021, among the Company, the Borrowing Subsidiaries party thereto, the lenders party thereto and JPMorgan Chase Bank, N.A., as the administrative agent**	8-K	001-05560	10.2	5/26/2021

31.1	Certification of the Company’s Chief Executive Officer pursuant to Securities Exchange Act of 1934, as amended, Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002					X

31.2	Certification of the Company’s Chief Financial Officer pursuant to Securities Exchange Act of 1934, as amended, Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002					X

32.1	Certification of the Company’s Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002					X

32.2	Certification of the Company’s Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002					X