QRVO - Earnings call transcript Q2 2018

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Operator

Good day and welcome to the Qorvo Q2 2018 Conference Call. Today's conference is being recorded. At this time I'd like to turn the conference over to Mr. Douglas Toledo, Vice President of Investor Relations for Qorvo. Please go ahead

Douglas DeLieto

Kathy. much very Thanks, welcome second and earnings fiscal conference call. to everybody quarter Qorvo's XXXX Hello include that materially forward-looking that will call This statements our expectations. results current could involve actual to management's differ from cause factors risk affect We risk encourage Harbor in associated operations as earnings filed our the on with well the the factors our published because as our risk with statement Form results. Annual today Report contained financial release the to you review may Safe factors these business SEC and and XX-K In today's both results. release and call we on GAAP provide today's financial and non-GAAP We may to to additional analyze the trends performance. underlying obscure or of investors and comparisons without performance to expenses the impact in our provide perform supplemental information financial certain results that of items operating non-cash enable other

our During results. comparisons and on statement to based be items comments our call, will non-GAAP income

non-GAAP President and Creviston, of James Murphy, of all I'll the members other and Mobile team. with Chief CEO; participant our earnings themselves Financial today management question a issued reconciliation And President earlier GAAP complete to Defense today and with please investors. follow-up. For Qorvo's call Officer; that, fairness Klein, are hand as Products measures, Eric under to Group our to that Infrastructure me of one Bob. please as well Mark Qorvo's President each over and release Bruggeworth, group Bob we Products ask of to Qorvo's qorvo.com In on refer available limit financial Sitting website, listeners, to

Robert A. Bruggeworth

sequential Qorvo content increased smartphones Mobile million exceeding leading of strong and Products, supported our In customer the September range. on and Thanks, quarter growth. Doug. ramps XX% programs. with EPS very $XXX dollar Qorvo revenue with was our key revenue delivered guidance a marquee both

demand antenna RF XX Oppo, supported modules China BAW front improved At filters, envelope including flagship at our of devices we and tracking in to partnership the At also award. power their Mix tuners, into Vivo with Xiaomi, RF we more the were solution. highly-integrated content Huawei, environment we an Mate Fusion our Xiaomi, with Mi management launch products shipped of from and others. benefited We receive top-tier Huawei, and RF X honored than $X their end

IDP, in could we Wi-Fi/ISMs. with continued solutions. growth September our Likewise, RF by PMIC built true for to device. with market content smartphones for we an tracking Qorvo design Wi-Fi/ISMs this today. of the and devices. market point underlying power the customer see driving exposure, our as tuning another in both success for wearable and management competitive recognize for bring. our power data mobile out of decade these and IoT, A our accounts have has are been industry and efficiency us markets overall where up target and product our growth a IoT, enjoys existing set this few now design exceptional a Take IDP, next-generation demand higher nearly home we industry required Qorvo combining to markets. require is continue is wins category momentum we growth. and launched in confident station, year-over-year target breadth better Qorvo expect additional is linearity value IP with management early our our tuning new will expect with and position Wi-Fi levels leadership Wi-Fi putting strong The our excels. We is in position and segment Wi-Fi supporting We in ahead revenue Qorvo is market. The innovation example increasing robust to uniquely very record GaN mobile over across will retail, opportunities complexity, the year-over-year benefiting at disrupt differentiated standout as antenna revenue a is expand our RF opportunity technology we and can this investments the our portfolio most connectivity both defense, In paying also higher performance applications. defense envelope models. in leader the a playing market the revenue This is or $XXX to XX% in off of modules. to In the content in market-leading flagship continue years outpace IDP today a front-end ago, cellular noise customers. Customers depth million in marquee XG GaN. increasing our double and ET and GaN, an customers only we smart multiple year base we're Qorvo's expanding we and a power, ahead. our growth year-over-year automotive, greater and industry-leading broad products and That's environment, integration In technology quarter ago, and coexist not content. supporting optical. targeting support first for robust portfolio the and quarter is given integration, attractive The selectively growth to Wi-Fi double-digit based have prospects offerings pioneer increased and saw advanced filters the December. same We're long-term opportunities technologies and segments lower macro to strong figure, but a the BAW across this our CPE up we In trends across in IDP the ratcheting of in quarter, September and on

seen IoT the September our revenue versus quarter doubled year-over-year. XX% tremendously IoT. In opportunities the also by in We've fact, September increased our quarter last in GaN-related Qorvo's year. grow in revenue

quarter, the Tile design supporting family. we RF tracker an front-end During the module secured win

of up band IoT to We $X. In and XXX car high-volume in automotive deployment per wins top narrow for also band demand secured strong narrow applications. multiple Qorvo's enjoyed performance optimize content applications automakers China, megahertz supporting low-power design IoT consumption infrastructure. IoT solutions we with the power IoT with

a we several design multiyear major contractor radar wins high-efficiency with high power, secured defense components for advanced in Finally, applications. supporting gas defense

All of investments represent that paying made today. by are strategic these Qorvo off achievements

Looking forward, growth we see the driving future. few what of a examples our cover let's in

As only to small through profit XX. we've support to our indicated XG line address XXX unique portfolio within gigahertz. we've XX promising before, the we're expanded largest the In target frequency a XXX products all most megahertz of growth the megahertz infrastructure, a product supplier Qorvo the This from that capabilities include of signal bands to makes leveraging band set opportunities pools.

of efficiency a with enables dual-transistor technologies. high carbide family process The reduce our versus traditional expanded discrete to GaN of power module. base also customers products, transistor levels costs and ultra We station achieve GaN-on-silicon module new

capabilities Finally, these we're LNAs. design power-handling track lower technologies the X. will BAW making and we Q and aggregation RF enabling switches and with to most We with carrier enable for on operators Class the optimal pursue custom favored better to superior loss, Qorvo's it power-handling with capability, multiplexers market. delivers development a believe of require attractive the PAs, as Qorvo move integrating program multiple will BAW be Power BAW higher segments and increasingly expect

content the BAW-based increase will of higher will a as bands favor bringing sets requirements portfolio. expect put, SAW that BAW. as and that growth We're view to BAW functions as our growth we and the of performance main move developing as increasingly XG, integrated market this today and as BAW. as for number smartphone BAW any to based and isn't BAW outpace With our exciting diversity best-in-class as well see units. revenue filter outpaces it's path a path the are apart products expect entirety one our of single industry of that We to backdrop, RF the it's products. into BAW filters, inevitability We RF Qorvo noteworthy and Simply modules. continue outpaces will using the to discrete use the we capability, with placement powerful product migration bands Finally, some technology what

operational accompanies in hand competing growth key processes moving customer business of technology drive is team technology product our generating We Our sustainable enhanced and launch over most towards that, extremely customer's Mark. In earning excellence customers the leadership in complex, And and Qorvo I'll the our clean to design to that best the strengthened industry's and well, long-term and product the programs. investing for complex expanding wins. the productivity to the call placements placements and needs. quarter, trust with while portfolios, customer where integrated Qorvo valuable are highly also most September wins address focused more on executed increasingly

Mark J. Murphy

in issue without points negatively by driven by reflects XX.X%, second Hurricane basis margin team contamination The in defense and year-over-year at stronger Thanks, fab. was bring million, root in midpoint and electronic any Bob, quarter quickly revenue Qorvo's to applications. Mobile Florida after XXX the XX increase Gross quarter Irma, emerging points. including increase quarter of in revenue and of largest a $XXX sequential was of was of advanced including good of Gross was $XXX for a the IDP effects products. basis impacted the revenue IoT fab customer $XXX impact. afternoon, was in the our back and exceeding our million, air operations China guidance the in customer and million. million did remarkable isolated up $XX identify And Wi-Fi job an the our caused everyone. Florida which cause a margin strength by connectivity, radars and business. other continued warfare growth

margin Excluding been these in our guidance. gross would've costs, above the quarter

the from of $XXX overall well quarter through timing. Operating customers basis margins sales, XX.X% million, points down exceptionally expected, fab is spend seasonal expenses last year. as supporting XXX the for and up utilization productivity or basis the ongoing in quarter prior versus approximately on on efforts quarter points $XXX business were million, While was XXX income performing the weighed operationally, ramps. and Operating

to During certain operating count the a reduce improve reduction second costs quarter, efficiencies. actions, head and program, we including took

consistent portfolio, to and greater us net to of help achieving and As containing flow. costs was was per and we've income profitability lead excellence $X.XX will efficiency. $X.XX, the share on million. of guidance. our managing approach maximize culture cash product $XXX improvement and focused disciplined our Non-GAAP our earnings a free discussed, effectiveness midpoint believe driving continuously sales and operational We Diluted we're over improving continuous growth a

at decreased expenditures in of more other and wrap investments to million. Capital up quarter capital the $XXX support intend to to operations doubled $XX commitment recent to stock tool repurchased We $XX million shareholders. from flow return cash million. conversions quarter-end and part growth. future of $XXX to continue expansions, as we ongoing Second-quarter to buying as million Cash sequentially was than an

at the $XXX our approximately the flagship midpoint between $XXX of reflects our models for margin revenue continued flat, outlook. demand non-GAAP we turn expect In and XX.X% year primarily gross Let's $X.XX our strength of EPS fiscal and and million to roughly diluted expect to gross third in quarter, to of guidance. This XXXX effects. our guidance we customers' on view mix due remain margin Sequentially, near-term IDP. million,

next margin efforts productivity gross to ongoing mix, at quarter expansion the March and expect flat are Operating increasing We resume and million year, December remain expenses quarter. with forecast improving in for approximately utilization. to the $XXX into fab

mid-October, Our In of and down impacts. supplier. a outlook recovery expect the We quickly also and reflects to a our don't with shut fire had qualified of laminate and quality minimize the any a to engineering, production. recent customers operations, plan major the suppliers our suppliers working other relationships and impact teams, of event exceptional Thanks launched sales a at efforts customer and we event. collaborative close one our

of Our guidance. have event the been today's into and of revenue cost impacts estimate factored

our below decline expect For continued continue than we XX% to of the less we of XXXX, OpEx towards growth. operating IDP or revenue forecast to of model than $XXX CapEx of the as XXXX, sales. of or year, with sales lower the the In the new project second double-digit less fiscal from through full million fiscal lower. dollars December is drive gains down platforms remainder We to in be and year rest March. on XX% trend forecast ending half, to to year-over-year seasonally mobile growth, strong we

second in above delivered we up, the quarter, quarter wrapping guidance. So our another

free forecasting For growth, cash increasing the and double-digit second to operating a half, flow. with return we're year-over-year expanding margins

control Our to are operating flow paying our for strong are is are With our our that, in and running operator call cash over and improving. technology turn questions. and the declining; back ready I'll growth; operations off; investments costs free for and well the

Operator

Thank question up. to you. one follow and Please one limit yourself

Okay. And first we'll from Longbow with Burton our take question Mike Research.

Mike Burton

Thanks for guys. my Hey, taking questions.

And in Do you quarter. then be market expect the – to the mentioned? do First in in looking be or on calendar you ramps through? your to than better play the to recovery that market to up? as the line overall those continue that outperformed September QX expect due good you Thanks. you China ramps those to do And see think in to December,

Steven Eric Creviston

This is that. is design China We have primarily. we and on the power Wi-Fi Mike. content quarter as example. Hey, chunky flagship Eric. Yes. take tuners, products mentioned, September Xiaomi and did A lot strength of I'll wins the in forth, switches, win dollar amplifiers, so one in just across

So as a filling to begin ramped their bump distribution, we those see in of up September. lines did

we be we're in be of units those sell-through of a terms seeing so think toward dollar in what require Again, mid-tier still December, in to prices generally handsets units China December. the carrier doesn't flagships. RF cautious mid-tier see in content. content Going India. forecasted pretty growth are continuing into will instead the towards heading The mix still we which actual of the similar in as aggregation, We of to now, really is little

very So saw to a Qorvo really but lot a with ramp flagships it's September similar due the new bump of to what these with last of in quarter content. we

Mike Burton

them Eric, progress just And usually the in a for hoping with down help QX customer was Thanks. XX% going hard could also And them? are pretty your you quarter? think then in but Great. your I us what they're into for detail QX? Samsung expectations

Mark J. Murphy

Yes, Mark. not customer a They quarter. in Mike. This were is XX% the

Operator

Nomura/Instinet. question Krysten go with We'll to Okay. our next Sciacca

Krysten M. Sciacca

Good Hi. evening, guys.

quarter? XX% did you the plus for other any question, have customers First

Mark J. Murphy

have customer. a did XX% We

was XX%. customer largest Our

Krysten M. Sciacca

there. sale Okay. a Excellent. up your win be I design kind to that functionality should describe show expect automotive in And revenues? can you on we moving for? you. when to design in prepared mentioned start exact And that of comments, the bit to can Thank see then you win know what long really to that cycles was

James L. Klein

wins James. year, early aspects were SDARS. The year. again, about and we Yes, focused LTE-based revenue and, the particular begin on we really We're this this automotive to being key design is chipsets LTE later in Wi-Fi, expect would next talked

Operator

And we'll with take Acree our next Cody Hamilton. question Drexel from

Cody Acree

some puts China Maybe, not basis, Thanks calendar an if maybe question. there's for maybe guys. look could Hey, calendar back visibility my that best go some and sounds you quick. like but giving we real It Eric, XXXX, annual taking at takes if China wins to you your XXXX, the on lesser get are it getting these what to for are shift then dollar you're You're are that you're probably content. but expectations content getting are towards a outside going growth? mid-tier design flagship that also lesser of also giving dollar that's you products and then growth

Steven Eric Creviston

of times. requiring think about to ongoing many clear. is in we've trend is is of There as and that complexity it value, the the Currently, need an down we at trend And That our much carrier requirement up believe. at aggregation higher-value carrier come into point of is year transitions see. XX% It's customers market our premium the hard The that It's that term, that's BAW-based the to aggregation so with to for does looking this that. next higher and be to as and required market, course, to natural demand it's over in And India, aggregation, example, we will – over just an RMB tiers, as rates And going X,XXX that even that is long take the believe of actually, India more I handsets for we'd looking RMB mean, from returns EU aggregation. sort would not enabled. exporting and they'll carrier a that current trend X,XXX, more parts cycle to today, combined that's don't SKUs. enabled proposal, only is to situation. requirement carriers, and current are We the rest markets. customers like with CA always I are more for that the very they it more just back. quadplexers talked mean, with but at the is some a clear to XX% the of nail handsets the as that is demand spectrum, higher. compete our well. frequencies data The drive carrier RF more requirement CA China ready capitalize Yes, for as the as of fundamentally India world's if fragmented timing lack all very on quite year data

and calendar of Not $X billion customers, China doing in I as but are fact. think well opportunity XXXX. Samsung much others exciting in that's matter a could and think market our a for we as RF as India real be only

are trends very intact. the long-term much So

Cody Acree

(XX:XX) So is do for type at longer-term swag you that CAGR of a basically? customer what the have

Steven Eric Creviston

in I of off my think, head our with line it's don't the in CAGR. the growing XX% have general, but XX% still. I So number overall in to exact top an roughly range

Operator

take our we'll And Quinn with Company. Needham Bolton next question from &

Quinn Bolton

Hey, shifts mentioned. guys, address to that timing wanted you the had

If look guys consensus the have sense, million know call, so to you don't any all I about are into our or expenses by then heads for but be timing Street second level. the how guys Bob, or December sort at can us revenue give – to consensus you projects. think was you hear March? guiding important you you've long-term, talked that we access on And going some of expectations very question I may shifts guidance from, the of you $XX models which about much talking but into is here affected perhaps, to about good streamline cutting below

development You've largest got custom customer. your module this for

big you some diverted didn't opportunities towards. that resources you those there's projects? also reason shift a diversity that resources those acknowledged seems so to of why (XX:XX), in you today Any you're pretty think receipts not those have have spending could lot guys some I like it

Robert A. Bruggeworth

Yes. Quinn. Thanks,

tracking let I we think off not about a you split And I'll expecting of we'll IDP was the as about quarter hairs but question think $XXX second area. little And exactly million. by $XXX million one, little planned, and the is last the bit million it number your in bit first $XX question mobile – were so part talk you of The think there. Eric part and And address gave it's about said we exceeded I I let's you

Steven Eric Creviston

to at is or flagship forecast It QX about lower not is expectations. that the customer. outlook expecting, we're what for multiple our mobile It's those, Yes. across in it's talked clear customers, take than sales previous We've on product for just related the it. least one

I entire that now the try think and overall market it's delayed lot their before and buy. because latest they many product of are pretty get effect. years; they public clear buyers those cycle are compared has to to want regardless a a affecting the that that, they an largest speculating that the it's our handset has models what And clearly on waiting to customer very premium hands of decide, past

out least feel a So been the we at cycle. there's like general during push

Mark J. Murphy

loop Yes. Maybe, on Quinn, to close revenues. the just

And any now mid-single OpEx, normal priorities programs. to March, Eric into more than we our is far a the as digits decrease then far as right Bob look quarter out for forecast to that sort December March. as difficult And not on it a and dip to mentioned. are of seasonal So we're then changing see, reasons we so from on as muted we what low- as calling

company's the in it's be view more matured We've most merger. would efficient. more efficient, In – a around of this the defects. common on making to its done us defining just them focus fact, on we lot and And work We're system have. narrowing now. reducing allowing we opportunities as got processes a The valuable

take did don't sales. we'll about I in see net company. plans at as a This some – the where OpEx with targeted of we XXX between end in people my comments, of are growth we'll the And the we're We more our point specifically cost at the sales that believe category. interfere to the we that. XX% end of actions up and mentioned And OpEx as and year can are are those then ended and XX% next trend that day, to So we year that XXX percent we of reduced goods in About continue folks XXX of drop. see have down.

Operator

And we'll Srivastava. next from Ambrish take our question

Ambrish Srivastava

are so In the what you're I issue, Hi. Thank Could sure quarter, we first up And margin should the investors fiscal year? to margin, you March? my And had just that to question then guiding it beyond the a issue. make are down. it third backing the expand from And that but you then part, related – understand start target very to fiscal to the are, that is, given please? revenues about get out of mix you mix gross you like think a you want XX% gross exiting you think trajectory how was much. – I Thank alluded sounds this. you. the if I but said will expansion

Mark J. Murphy

Okay.

So the Mark let part. is take questions – me the in this – I'll

So we second flat. the quarter, as first, reported is on the you relatively mentioned, and XX.X% guide

in we the we've the the down linear, this Florida of And XX.X% we up – guided, before. so back PAD mix. XX% fact, low-band been the not but, the we related had an but more is end And to would primarily that absolutely are gross at you around never increase in example contamination, really of margin. that increasing our were points to that our have again, modestly. margins, are expansion margin I've on target. planned the second we're be we normalized margin which we mix, quarter you backing XX% because is and XX where indicated the normalize Talking off from decrease if generally, clear air you we basis that add If issue about

guidance ending increase our the gross effect will we from beat a say And we I each – year margin second fourth hoped mentioned, as made excluding year. at For quarter or foresee quarter year, XX% again that then in had consecutive is the don't this December Florida in that increase in we in gross the quarter, the margin past as the and but of March our to this quarters. and over expect we've again we

we we So is But things where a the We not believe roadmap of out and that we do on the not growth, going handle on. to Not pleased understand talked see We're which certainly as we're be. before. control, but expect to indicated, as the How forecast. quarter. want last be, in as through I'm there? important Day, our about have going XX% We're the where volume gross Florida easy to to a expected margin, I but we we we to there we we're what's you there going saying able our heard are to to not get thing it's with said market. Investor get do drivers. outpace do do as

We a has be and IDP helps we've and utilization expect through products. Tuners, Utilization, year is year. into that mix which forecast believe of our criticality point the happy us margin the the on quarter both we've to second and this that of drag enabled our I'm of margin to and say PMICs revenue improvements we growth fabs. and generally, volume talked rest in talked then low about, loading our better we've this specifically, on reached business been biggest as BAW on mix and on next in that increasing the the about that margin.

course, we've intensity and wafer underway. die, before yield, that. that projects, of still Improving Finally, shrinking we've with associated of about talked projects expansions reduce that traceability then then number got the a the productivity capital are and of

exceed to this our confident do time. expect again, to it for ability reach So, that from year, March. we target margin in rest expansion and And in of December actually the

Ambrish Srivastava

question given and be recovering from the Okay. Thank you. trough. a credit should you Thank from for difficult answering you

Operator

our Okay. question We'll Hari Sachs. Toshiya from next take Goldman with

Toshiya Hari

my Great. you Thank Yes. questions. for taking

one, business? the actually you actually And of you I hoping would last quarter. to terms that terms do on when update six about when ago an at in we in not that about was How relative do The or could of talked efforts and largest timing, know customer, feel win or do months first would give three you business? we opportunity you development you whether today winning that your us Eric, which

Steven Eric Creviston

for to this We've Thanks amount opportunity. continue believe and We're Yes. improving and samples track. we're learned we've on a high-volume the and development. today. prototyping excited our our tremendous be It's our delivering the question. we as gone design about We capability very technology through

In continue until so not have it's year track. approximately over commented design technology in this programs to it's And the outcome meantime, impact from we to earlier your the the as should believe and lot well, calendar And roughly end on we of we're of to more that. as of and well. terms on we other answer forth, It's capability clarity over. the a so is going as that question,

and there. around driving enabling As the we mid integration of higher the see, high bands centered levels CA in are and generally, industry's toughest problems most value

still product. a important capability us. grow it's and bringing that well this to track So beyond we're quite it's is that with very, very on the We're confident going

Toshiya Hari

quite I us remind in in hoping as the the how market then can a days change of market couple potentially you. And past opportunity your SKUs Great. is of share could Thank with Qualcomm going was guys forward. over heard Okay. a all SKUs. to follow-up, opposed the terms the how we've modem different you as Intel bit

Steven Eric Creviston

Yes, question think it's to about. an interesting

in driving, from systems engaged it, revenue carrier we're on and we're course, are in Qualcomm, aggregation today. entire HiSilicon, step fact so solutions bands of really, based RF developing mean, out the we with for premium kind of advanced front delivering base the production winning you Intel, platforms MediaTek, full RF back end there, all And particularly Samsung, the Now complement is we those functionality all of that the all tier. LSI. on make those the with up I and needed if a

sense, we're agnostic. on So one

and think We in are real I enjoy alignment very clear particular, RF the at band. we you has the and with a a from do and been the have if it's market entire supplier what's that is our them we cases, many industry separate there. ET selected, look today, working base track, success in that, in to said the Having good Intel with

Operator

our Ackerman Karl question we'll Cowen. And take next with from

Karl Ackerman

I Good questions. Hi. have afternoon, two everyone.

Could quarterly question ramping you so And how the across customers backlog top to visibility all I devices, And customers? devices basis greater you and for you you new historically? seeing that there guess in would your on given please. in propensity in channel customers have flagship given own would your mobile of had than on more with your top inventory. agreements I are a First and ramps is contract is you're describe you levels various the a engage characterize a of three your your longer-term have follow-up, that increase modules

Robert A. Bruggeworth

shot Let me at take Karl. a that,

customers share our demand far do last for out that. and we as what their we the a to quarter As how I we'll on well, year this call about we have and agreements they as schedule business, react major commented and project where

week-to-week when agreement perspectives, as we've it's to consumers, backlog a change yes, we're from to year. like we, we visibility it's that know going going So don't because got phones. for And know – contracts but the buy

with our the high-volume our that predominant that's customers. large It's of way market share done today. So

complex maybe some they that the and more as capacity far place ramps are like need as their in that. phones as in China, customers with get they things ensure more of getting So, go is sophisticated our and to

sure better of didn't ago, much visibility years get. customers of we now, that two getting, out are set that we So

overall, I'd successful they that and the their get of are yes always, the how when say understanding as is issue phones market? plans, launched to improving So it's perspective it's

Mark J. Murphy

are is, the been factors tactical one down. drive – just I a of to levels reason Karl, own maybe would bring our very our it of level. has the just bring we utilization much to inventory trying poor, Part

loading not then on of see fabs And and inventory for inventory closely those all purpose do healthy gotten the and focusing associated China channels the cash risks through watching very those year. more the related, the So and strain. have we we're also,

development. pleased about we're So that

Karl Ackerman

quarter this of even your a and margins. margins profile. expand really op challenged articulated and, able margins a about XX% is were as up follow to gross margins. one-offs outlook up and margin to two this being current to bit Though guess to ago I your do is that toward that margins to gross due XX% years course, you for I margin longer-term XX% understand some then, had

Now manufacturing increasing next more wafers and, inhibiting from China two? you're PAD year is larger first you year or of is the that presumably, after achieving headwind onto tumultuous half and a your low-band sized over to the guess I what smartphone target beginning next shift abates, this that improve on

Mark J. Murphy

weaker period there say, a out target. will lot expected. think, of BAW I drivers heard seen be No, the we you market in we've laid the able CA to requirement get we you've as Karl, was BAW that the than that Eric dropped and discrete that achieve Back believe for and

tremendous product. to load our product way manufacturing will largest that BAW on improve do are PAD We going that's version we margin last going improvements expect those just certainly the continual as just And margin. to to largest help the our forward the fab, this growth we on us over and we several which that our the to from one, years and yields margin. Furthermore, is factors in next in have drain continue low-band make,

Operator

take Edward Equity Snyder we'll with Charter question Research. And our next from

Edward Snyder

margins fairly seeing big in for antenna to we're count most the of And getting product could, must you already customers? Bob, quest we each, in the you out are the on then And ramping that Wi-Fi cellular business, you mentioned know of quantitative how on anything budge just group I'll you at said on if on are maybe Richardson much and forever, did a – bands? models? know guess more this if you traction of bottomed spread iFEM on if the finally, off? correlates in of you group? it? on I'm How weighted I perfect in what to it the world quarter for Chinese a of what's of could more Mark, can side the I and do that better be. but to think your you Wi-Fi utilization just quarter? James' And there one us just but guys. doing largest down seems get guess best much or infrastructure? it I you're are due net with your you're how the the existing And a rapidly. PMIC been answer to cellular is or your CPEs an an at could defense you of GaN running doesn't wider in a are much the mobile And into chances iFEM perfect split into gross in update ET between to moving were performance a know of side Richardson put the be overview for this them trying to that shipping give Richardson. Are – I what's I world that your Thanks, business? – be a what have suffering if is number then, into guys. of there I James, to penalty you taking increase take flagship tuner moving maybe heavily moving you what in and bands know seems Wi-Fi. much idea And and Is former. trying Thanks, are just which you normal production your the where us OEMs get into them and were order. Eric, could the levels. content it

Robert A. Bruggeworth

for split, you helpful different The appreciate so Wi-Fi appreciate one. I to the address the CPE for group, your if in many giving that that would be the places and how infrastructure, defense; one. me Ed, GaN questions I thanks want is cellular ET him. we GaN, you PMICs for sell mentioned easiest that James,

James L. Klein

as I'll And Wi-Fi do well.

Robert A. Bruggeworth

That'd great. be

James L. Klein

Thanks, Ed.

GaN to doubled see we reported strength We continue it year-over-year. with as

into we'll business. VSAT think the TV see next that moving forward our been defense, cable trend by I quarter. Largely and driven

become so move common stations, when our see products we the early our go things for the amount the I up year-over-year. is, ask business macro tremendous If has the integrate driven both really well. into Wi-Fi in next box. revenue and in as side, iFEMs, great XG including Massive That base in That's able to business station in XX% base you material, as a or year fueled that and MIMO will You into production ramp. connectivity iFEMs being growth of into what's some business been work technologies was and mentioned

fantastic next that ax, performance required in and So really there coming foundation for we that's enable the also the to believe products as that long-term product thermal throughput and growth set along. we for We're the standard the company. will high our transition laying

Robert A. Bruggeworth

Eric, then to on the you Wi-Fi and into pick do want up tuner well as move question?

Steven Eric Creviston

Yes. Absolutely.

high-performance. using indicated, and pair you So flagship still mobile, iFEMs served the from the in Wi-Fi module the disintegrated system integrator. that's integrated XxX the it be a of the through us. for to the are a would today sold package our iFEMs as little of front-end And was industry and for a typically our modules devices MIMO, China – for China couple market, of towards that Wi-Fi so the largest certainly which were traditionally forth filters system running that moved package in and of coming customers in they're buying And faster And flagship are. out

that where marquee penetrate and to when in is Now forth, by and think that be that directly architecture. might your the for I X largest and could structural and Whenever we their to cellular customers LAA. the start let's amplifiers and driven the especially gig our it's see. actually so like a the Then, antennas change handsets? change sharing going commingling order see – Wi-Fi in think I area, might that technology more question happen, disruption that's

asked tuner content you The first up. about the question going was

you antenna complicated very well further the beyond MIMO. particular support as to in the business. are that sharing driven, But well. and tuner by with us. increased increased as It's said count, We pleased actually very antenna It's going for by the

adding not but less. many space. made transition area antennas displays There's just there's full screen So so antennas more once antennas The can physical to only much for they the has add. they're even that these

adding best antennas they're they but can. So add doing to the they're fewest their

just cellular, So increased of example. given you but things, in not various a of an antennas they're as as tuner a places. these element antenna so as between need do sharing that content couple multiplex Wi-Fi when to for can a and out And much and antenna they signal that also there's plexers possible

tremendous right So innovation there's just now. amount of going on and work a

value now customers where really generated fantastic being right a engineers our of antenna help is the applications We team It manage and industry. these have to designers of networks. ton in working is a

Robert A. Bruggeworth

question gross Richardson the to margin? Thanks, impact about Eric. Mark,

Mark J. Murphy

is of network. on XXX impact Yes. in this and And of Texas, lot about points is margin as in there And, so of lot variables and fab. around quarter. quarter last basis the utilization Ed, gross is the more than benefit we that a depreciation a our in you The complexity offsets talked the largest our know, fabs

over that. half it's of So

Robert A. Bruggeworth

Operator?

Operator

go We'll Bill with Okay. to Peterson our question. next JPMorgan.

Bill Peterson

view, mobile the growth sequential think can Yes. guess, quarter, you for continued IDP sequential the products? point If in about I December for you give talked near-term the off, IDP and, a a strength question. first of guess I I we about Hi, feel but guess just us

Robert A. Bruggeworth

sec a us Bill. there, Give

Mark J. Murphy

are for And, you just Bill, clear, talking the just to quarter? be

Bill Peterson

quarter are in guidance, IDP? guess, the or for embedded what sequential we kind growth, of I looking for the at just I Yes, within guess

Robert A. Bruggeworth

digits. Mid-single

Mark J. Murphy

that Yes, and the the XX% over similar quarter second expecting year-over-year grew, know, business in you in growth the we're quarter. third

Bill Peterson

Okay. Terrific.

come gross you XX% XX% puts track the but of probably the we a XX%, last model to ops? perhaps from in you I that to feel I a margin, will point the exceed maybe guess prior Q us our in terms of the target year-on-year view. I on details quarter are in of can guess So guess, give mentioned relative out operating us for how performance

Mark J. Murphy

make in XX% the margin well has to of his managed just in actually he exceeded I'll a general statement operating model. be in that Well, And, James ahead quarter, business. this fact,

Robert A. Bruggeworth

quarter. again And next we're do to it expecting him

Bill Peterson

Great. Terrific results segment. in that Okay.

Robert A. Bruggeworth

Thank you.

Operator

And Lynch. Okay. Bank next America of question take with our Merrill we'll Arya Vivek from

Vivek Arya

and my Maybe Bob taking for for Thanks one Mark. one question. for

as great. Because guiding not soft, first the visibility tends often right, based I perhaps is definitely one, than that you're if Is so roughly seasonally quite to For to be March better on math March is my $XX seasonal. think firm million, orders?

you will wondering, largest the some shouldn't flat up mix And in is Thank gross recover on I'm IDP December mentioned and be gross the underlying but fab So of be margin think Bob, if you of you. Mark, are and assumptions assume December? because for your what I just is that. perhaps U.S. customer weaker side, issues, better the I margins gross margins sequentially in

Robert A. Bruggeworth

Vivek, I for need did quarter. question you to a What clarifying the you revenue...? March had, ask say

Vivek Arya

up is be sort will half second I'm – my but saying XX%, right, math you're just hope to if because trying so I Basically of -

Mark J. Murphy

mid-single Yes, digits. also Vivek, And December March we down to is what to that double then low- we second-half, we'd said, digits. said be would be year-over-year,

Vivek Arya

That's things March you're guiding other and seasonally I'm wondering tend to Right. be that softer. visibility but what

forecast on it on your based is assumptions? firm So based orders other is or some

Robert A. Bruggeworth

you Vivek, number with make hear $XXX one, million, I I We agree your want whatever. million correctly. couldn't don't sure. $XX or to

know well The it. the announced said, it sell of our think our from years. our we customer's and that different based the in that's than phones we seen down more So always, that. going prior of do, to provided marquee mid-single ramp the visibility they December off of have business marquee customer. largest we've I'm when what perspective, that is as forecast. is on, as digits majority run on They've as we be tomorrow our sure judgment a I profile phones color look they'll scheduled we're March at versus as so shares And

going in we March factoring get in we're quarter. that's digits we mid-single be things, all these think to how to So down the

Mark J. Murphy

Vivek, margin, is far IDP, as in September, there's far was IDP. product as as of going that and the larger help mix it this is IDP as know, lower mix And, is seasonality growth so margin December as on yes, also And year. but then within fact to then, than all the the we unlike last is the in unusual matter

mix sequentially. is mobile the all So shakes of factor when products, the it out, dominant here

Operator

next Inc. Srini our Macquarie from on take you. question A Srini Capital. we'll Capital (USA), Pajjuri with And guys. Pajjuri question China. Thank - Macquarie Hi,

any And BAW you're about competing are a BAW competitors TC-SAW, of segment, premium solutions think Bob? into the how penetration there market? running what's you mentioned seeing your BAW Is in to seeing you progress SAW-based of or there. more or BAW then also in there much in way You that the are still

Steven Eric Creviston

Yes. This is Eric.

some there course are which solutions discrete are we providing. BAW of So

were driven triples has are Srini in carrier my the if just question say, this quadplexers, those Inc. indicate (USA), for Pajjuri to. we're guessing Eric, roughly the BAW XX% we're be return the currently. that - you in BAW mentioned, to forecasting we requiring some opportunity, we by didn't BAW-based, that increase an was go content BAW year, XX% a were you that that. we BAWed saying So next market year referring I'm So let's right? the which seeing Capital penetration aggregation year, the was really quadplexers. opportunity aggregation What to clear, And I carrier win that more guess to Macquarie that last that's in Huawei we was is from when requirement there which of primarily about about

So curious out if new that's BAW against or won design existing a there? I'm that you're suppliers BAW just you displacing if TC-SAW the

Steven Eric Creviston

BAW no, Yes, existing it's bands.

Operator

And our Raymond with question James. we'll Chris take from next Caso

Chris Caso

you what three-year improving expect Is comments of in some the Eric, over about conviction the would as XX% you What through. evening. something next what do of Good importantly potential go the with profile over follow-up period. could the carrier you and aggregation the of BAW I utilization. achievable think to talk Perhaps Yes. is to on think TAM XX% utilization that utilization And capacity that wanted improvement I just the mentioned the you year? And, be of you there of TAM. to that? profile that? is would that had know on this of the for you driver be be a

Steven Eric Creviston

our aggregation carrier drivers filters in that I Wi-Fi, talked attach for about. have coexistence the so of Also Yes, think are the that Wi-Fi. the we we've BAW

working as it. on Some custom that it's we're amount of are these BAW content BAW-based, of mentioned has a the today that I course, in well. antenna that plexers then tremendous module And of

those to of are is is towards a in different the predict trend the and, a BAW. that timing but things opportunities trend clearly of a there's each several there's So harder layering going that again, clear lot on to little of in layer

Mark J. Murphy

just that then, to less or And increases just next loads as XX% BAW-enabled we're revenue things we're our increase, a these now. And managing the cost-effective That CapEx. case as and die XX% believe in as horizon. going we which the and way, loaded would expected. mid it then capacity, to most then wafer intensity doing so additional forward. very Farmers capital our closer expect in about we year, of will We're And be talked the planning year reduce plans of the next need Branch. to Richardson, carefully then play expands shrink, it Chris, By we and other becomes size we've the business if XX% going the than all be out that before, specifically,

Chris Caso

contemplate up a or Okay. And customer does that, to follow on think additive just largest your to that I you BAW as said would plans, that? XX% penetration number your at that be

Mark J. Murphy

and need leave need continue do the just to to we other in to well in get it, business SAW-based to also a going GaAs-based winning and things. Chris, order products BAW-based doubt. utilization PA we're And want, I'll revenue that without we

So we on increasing our focused are with high-quality products. absolutely profitability

Operator

And with we'll take Malik our next question Citi. from Atif

Atif Malik

my taking for Hi. Thanks questions.

impact customer. June the March year? phone seasonality you than flagship Do seasonality. of on the question is of launch because Understand Korean out below seasonal seasonal The first customer better of the that of could quarter be that quarter because the is on every push the think

Mark J. Murphy

guidance, March not June not to sure. We're for going guidance. We're give giving

Atif Malik

get your a And SAW the also with the you We is margins. that gross us could your But with Maybe enough. process hear in don't these these What excursions that about issues. BAW it about they're their issues margins supplier have help of running with on new future? I process having it's you on lot question manufacturing in more agree laminate made complicated absolutely is Fair in these from gross then, Okay. excursions, guys is Mark, keep talking earlier whether progress or I a it other and on guys not then with have but makers. they're Ambrish comfortable what issues it everything? and RF it about call. but manufacturing

Mark J. Murphy

wafers. our fab the there's were filtration on it the the the and think and And our really quarter, compounds defects layers sufficient. distinction. we or very decaying it control. Last that some there of important looked you something had it of just some quickly in out interestingly, argue a folks an year bad could the Well, at running manufacturing excursions these was ourselves the running, we make act say and been in I this Hurricane an cleaned it, off. here, the fab One have are after literally our would processes instance much wafer The ramps was the control. where two days the paid well. and mentioned going God, better. it's on And vegetable on year after associated out wanted in disclosure, sure up very was interest we with Irma, And of sulfur understood and wafers, of metal wasn't And air up back turns hurricane I matter is the are conventional to

the have on with and impact team. the again, event. it just suppliers to qualified we That's thing. problem control minimal laminate our not fire very our good Changed out suppliers, by And we're what with worked worked root-cause so away part, we did to the other changed supplier, dissipation, as customers, analysis had of it, we speaks the a some the this our action important then this mobilized, good is natural at we qualified track then recovery these see the went operational impact some but and and a excellence and on customer. from filtering And

Operator

Stanley. Craig Morgan And with Hettenbach our we'll next take question from

Craig M. Hettenbach

in opportunity Yes. looks come Thanks. versions to at with mid- on competitor, of shipping. back the to one of the this the and it current band is like Apple I phone, wanted and your least high

gone sampling. processes And all so they've and the and through trials

year? your at into prospects change terms what that the does next of thinking in as are all go you So

Robert A. Bruggeworth

at Not all.

Craig M. Hettenbach

Okay.

some on running you you which driving in so business, the in space where talk terms is XX%, of about that the the of robust IDP is see sub-segments really growth? can And

James L. Klein

quarter business distribution Wi-Fi. very with and radar, Substantial our EW, were in earlier, we all channel able talked well. our And the we there defense I comms, growth had as connectivity our major was great in as through strong really Yes, a to what across do business. sub-markets:

had we section a So customers. broad of

you're the can that to in multiple growth in IoT segment. nice And SoCs had also We as standards. at the industry first have aware, we're operate

been able Silicon are We those of get as to an industry of We've the Product great Innovative attach rate seeing the example, gave awards. Computing, first us year. chips. Most Embedded some

also in we created growth. that's greater growth substantial talked XX% And So about our business. than IoT

been broad-based. So very

We NBIoT, a Bob's activity. and cell small was year is as been like last strength could that believe breakout also cell this talked we starting It looks years IoT India, we cautious We've in And also, for in a China. saw is small maybe in about many in cell about couple script. ramp small the in the years.

say. I would So guess I broad-based, pretty

Operator

to or call will And that for management turn the over any back remarks. concludes today's additional question-and-answer session. closing I

Robert A. Bruggeworth

largest tonight. our to night, joining markets. growth the Good to for is our Qorvo you. product Thank thank of valuable us you we with at pools across you tonight, and target conferences. us diverse forward industry-leading look you We technology thank portfolio most upcoming and opportunities profit leveraging and joining meeting the many and for

Operator

your Thank you And this call. participation. for does today's conclude

disconnect. may You now

Qorvo (QRVO) 1 Nov 172018 Q2 Earnings call transcript