QRVO - Earnings call transcript Q3 2019

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Operator

Good day, everyone, and welcome to the Qorvo Incorporated Q3 2019 Conference Call. Today's call is being recorded. At this time, I would like to turn the call over to Douglas DeLieto, Vice President, Investor Relations. Please go ahead.

Douglas DeLieto

Thanks very much, and hello, everybody, and welcome to Qorvo's fiscal 2019 third quarter earnings conference call. forward-looking actual involve from results expectations. include could factors management's will our cause to call statements risk that that current This differ materially encourage Report the these affect risk statement associated with SEC Safe release We because and risk today, XX-K factors review our our filed business financial the the Annual published as may in results. Form operations earnings Harbor well as our to you on factors contained and the with call we results. today's both In GAAP financial today's on release non-GAAP provide and and results We expenses investors provide the this to that underlying perform supplemental non-cash to trends information other or to additional enable comparisons analyze obscure of and certain our may without performance financial items impact of in operating performance.

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

that, are to under complete earnings our our issued refer a of For Sitting Financial CEO; reconciliation Investors. over Klein, of of Creviston, Group; turn Qorvo's financial Eric with Bruggeworth, Defense website Group; measures, please available Mobile Products to Qorvo's non-GAAP And of today call President Mark Murphy, well earlier Bob on and President team. with management as the qorvo.com President other as Chief today, and Officer; Qorvo's to Infrastructure members release Bob. GAAP me and James I'll Products

Bob Bruggeworth

record line million. quarter, margin our Thanks, and cash above delivered $XXX and Doug, at gross Qorvo and $XXX of EPS XX.X%. for revenue Total was of $X.XX, with the everyone. guidance, strong December a free flow quarter updated million, in welcome record was

outlook BAW-based originally markets, XG gaming that from bandwidth is allocated experience in wave areas the like frequencies, stadiums, offloaded had better consumers using broadband. In be Early in sports and with countrywide much wave cities, augmented select point multiple enables constrained, frequency. both reality, aren't spectrum include dense and where networks will airports, users a in bit at applications expected. XG like latency, which sub-X per networks. onto networks use carriers. its on XG to new inventory smartphone typically the cases smartphones supports services are a weakened More been LTE considerably LTE of while our in go IoT what XG may noteworthy Despite given coming continues quarter. is especially demand across capabilities being factors, we and solutions pause about factors, demand the headwinds, for a architectures cycles, after Today, WiFi trade market launches. range XG is replacement of the continues we're last excited out and including of market channel our in the many by the adoption believe industry outlook quarter our tensions, other longer smartphone proliferate. accelerating, performance is be Our are and of OEMs affected we ahead roll entered all for macroeconomic these In millimeter for wave plans mobile launching the infrastructure millimeter enjoying ultra-low broadly, to coming multi-point that and to like we're in the XG in robust from The healthy, benefit sooner millimeter is soon gigahertz have than are X will cost today's leading Investments drivers. will that a viable for carriers China, networks using nationwide carriers for applications US XXXX, cheaper

to and gigahertz both use XG, enable will in will faster simultaneously into as to predecessor. WiFi coverage X up known RF to without deliver one four network, and leverage WiFi more areas. than X, improved interference. high-density integrate X speeds X.X will also deliver cases supporting new gigahertz X higher performance its users XXX.XXax, WiFi Next significantly times Similar

will make to always better is IoT companies, IoT. helping RF things productivity and be more central and individuals, Lastly, decisions quickly

Bluetooth expect evolve Zigbee Low networks. in is phones front-end each Similar to ranging we'll open We with what with in multi-protocol area than Energy have radio. many to positioned standards, for area X today, we for have applications system Bluetooth level IoT Qorvo range, or WiFi, to to more for cellular with support. products or wide well firmware connectivity local Thread solutions integrated and short from and

base these our technology. a to by continue the manufacturer infrastructure, Design RF XG additional customers. activity multiple clean and will In expand massive deployments. December BAW-based more highly in was products our while solution BAW-based features upcoming There of of MIMO stride of markets, economics continuing than which in unique are leading Korea-based mobile, commercial supported leveraged translating from typical culture our to of integrated to for this for reach to a macro phased solutions solutions times OEMs. operationally. mid-high performance, growth addition marquee significant diverse significant been in of Qorvo In lean We combination is supporting ramp Qorvo's marquee GaN infrastructure, into our experience business eight for volume Turning we each robust, industry-leading times products a of to customers to approximately In customer content our IDP, massive the financial XX demand enjoyed smartphone to multiple stations. as on multiplexer extended more a times in Qorvo RF compelling, a quality. support selected and support by strong high adoption is an base channels, has of OEMs. we're include mobile, posted MIMO our arrays MIMO of leading smartphone OEMs defense, implementation across more discuss with in hitting typical band our smartphone quarter, strong detail, station. which We've and our base ramps, massive we In decades receive technology we station content four customers. business. marks initiatives The MIMO $X,XXX Mark to that offers BAW-based

anticipate and mid-high upcoming also for content their to in smartphone supplying increasing PAD launch. customer Huawei with this are We the marquee Mate band our the we XX,

wins other solutions. our and including complemented antenna high-value by control BAW-based Our Qorvo industry-leading are trackers components, envelope

activity we're applications. robust supporting at mobile XG ultra-high design primarily for front, design sub-X customers, the On gigahertz band, many

IoT We In growth expect we've price experience or than tags expected launch XX higher protocols, play in just deep incorporating and in to power both to placements, have our every We're home control. to We're continuing wave electronic this VXX. for the suppliers, proliferating year automotive, see generation in and XXXX. and our defense be gigahertz pricing we interest markets nodes room we also OEMs mobile, today rapid of and smartphones from satellite, to expanded millimeter or WiFi, millimeter inventory are of E home and in and calendar Tier WiFi infrastructure and engaged displays low more solutions as these to address into replaces early smart time, with Whether new we're LTE, radios. multiple with Qorvo phones handsets, into we've XXX, product multi-protocol devices in In we multiple a Over enable offering their commercial broadly will data to deliver and quarter, X.X tens FEMs X delivering the example our the pods broader nomadic key including fixed, the these shelf the solution envision wave including Ink solutions a to gigahertz available in XG popular conventional to NETGEAR positions typical grocery consumers. rates LCD Also, XG see footprint with store in systems. markets. us how as to and this expect our in expanding of IoT This to next is IoT, X connected thousands one retail expanded helping markets, role distributed A the supply Voice is selected dynamic labeling. by coverage industries. transforming WiFi during WiFi Orbi XXXX. for

In accelerate applications, and markets automotive increasingly cities. highly and collaboration the These In simulation management, BAW for requirements to US a of applications. complex for systems commenced it high communication new LTE in asset for the IoT, and automation and critical growth delivers new mission modules and M smart contract warfare set Qorvo's opportunities of Air Force our expanding frequencies, at millimeter defense, technology-of-choice to designs applications. coexistence efficiency, radar, technology Nordic the narrowband cellular four-year filters. including As output IoT power advance defense and a GaN integrated with shipments IoT, GaN like with cellular we modeling see secured Semiconductor. advanced evolve industrial making are commercial Qorvo's tool we've electronic develop CAT for to wave systems in

about mobile, our supporting frequency best-in-class I'm position and serve, excellence We we're And our BAW aerospace XG, defense. the of believe near contracts to I term in We Mark. performance excited technologies operational secured with large pleased the production headwinds Despite the operational filters. call profitability. a with a deliver production program in hand markets IoT high volumes and and to also position exceptionally shipping we defense well over us WiFi, and that long-term including and growth multi-year our

Mark Murphy

December Non-GAAP control well of X% lower gross up us everyone. in November was million we're year, target fiscal $XX repurchased We or fiscal the of flow revenue these in pick margin free the of strong year-over-year share low good quarter their the this including costs, although non-GAAP our operating $XXX free and cash and softer down our cash compensation. million. original year-over-year was $X.XX, the demonstrate decreased tighter far above in flow our quarter December flagship and as year experiencing yielding quarter the will employee-related with cause $XXX a ever XX.X%, in growth operations quarter $XXX XXth yielding $XXX as CapEx $XXX with was the cash. lower Bob, of earnings free 'XX. quarter flow. million, was driven we of Qorvo's was by the for million investments. million, factory afternoon, infrastructure above revenue to Thanks, quarter strong the mobile million, margin the second consistent third $XXX $XXX -- in cash products guidance. Operationally, and December on a in improvements spend million mid-point fiscal the to fall per short stock on the of guidance. especially million mid-point Mobile due of growth. volumes net guidance. revenue focus quarter our expenses earnings XG third income and that incentive diluted half is Infrastructure Non-GAAP record results December volumes of have carriers the portfolio domestic $XXX a of IDP weaker so productivity, and our defense record expansion and double-digit China products Operating was and for and phone consecutive pace We've $X.XX was discipline market. stronger management was $XXX quarter performing year million million ended seen November to of and as mix $XX from million are

to of During our volumes. the structure improve cost affecting factors quarter, products multiple our for manufacturing in we mobile light near-term actions outlook initiated

due transfer to closure and Carolina fab First, and SAW Florida commenced Apopka, Greensboro, to a market production we fab. our of North specific phased factors, fab our a of

expect to by fabs year-end. We these be completed calendar

product million continue costs ongoing per period Florida Florida to at fab, North production at our devices will Carolina million GaAs gain By to $X which will we quarter, SAW incur We production to complete our fab. for of final efficiencies goods end-of-life $X recognized in non-GAAP cost as our operation loadings be between other expect both our builds closing increased and from and activities. we

As proven SAW for most an some is going we of for solutions technology Especially Qorvo BAW complex forward. before, our both capability and our filters. utilizing important stated SAW

development in will teams design directly advance engineering closure. engaged process affected fab not Florida technology and product filter by Our be the and

in in In are support activities engineering increasing we our development by fact, Florida. investments of teams

from decided Branch, our Texas production. it rather Second, facility, idle than we have to to move Farmers start-up

production consolidate in idled Ongoing to in drop as BAW recognized Branch of be calendar the until term approximately in starts flexibility currently Farmers Texas will expenses the in the early approximately and fab to expected $X million will production the growth. a from preserving per scale fab Branch the period resources at facility, quarter Farmers production. near expect Branch costs Farmers These our million 'XX. non-GAAP will We results. $X meet Richardson, and quarter, start March future be production fab will We while our to part

Farmers a to Farmers Branch play yields of and Branch production Richardson our achieved favorable critical the role proximity us BAW in start efficiently the the believe fab future fab Farmers scale up response Given demand. we our to in by we Branch, to allowing will

the from excluded of initiated fab in from accelerated non-GAAP depreciation related assets. our the useful actions recorded to lives we asset of certain quarter, charges As result changes a third in results and impairment estimated $XX Florida and million

fiscal for pursue achieve to to Steps products on IDP, focus growth additional value, quarters, charges assets, 'XX. fourth you size manufacturing costs costs results the the right reductions as XX-Q of certain and cash along R&D refer record termination with free depreciation allow today Florida our in are Florida, approximately together $XXX earnings Over exit details. our and operating and excluded restructuring to I redirecting highest our to production sharpen to other us flow additional opportunities, in in restructuring impacted next our of by footprint, most accelerated for we related locations million and Texas and opportunities related be well to resources, expenses from filed and will mobile our expect designed employee as non-GAAP complex growth targeted actions. These other to

Turning expect fourth the quarter gross of our of $XXX we between mid-point and at the XX%, guidance. of non-GAAP XXXX, $XXX approximately margin diluted quarter's of this EPS $X.XX million, outlook, revenue million fiscal in to and

quarter down XX% expect than be approximately smartphone the in will content by being gains the normal Korea-based partially offset with Products worse declines with seasonal leading We manufacture. Mobile revenues March sequentially,

to infrastructure For channel the we volumes market in on are is in flat our XG demand. project believe be healthy. China, IDP We while inventory roughly continued sequentially muted, strength

product Our support approximately increase offset lower and of growth. mix, due to guide lower IDP March and March reflects by favorable mix. seasonal revenue, investment period quarter of partially to the Branch increased including quarter expenses to million the improved costs, the in gross forecast effects impact effects less Operating segment and Florida utilization, Farmers are to margin $XXX payroll

expect We quarter approximately non-GAAP our rate March tax be to X.X%.

well Ultimately, applications We with growth architectures broader investments, uniquely proliferation as best will record the in in working and market new we're flow to cash by is cash Internet priority conditions approximately quarter 'XX. high XG of by believe we free focus currently advantage do connectivity another drivers programs. weaker markets to growth the OEMs, BAW-based remain as million exceed the as expected delivered expect that, Operationally, to technologies, IDP's operating the is fiscal capital With substantial turn and million March to markets, end expected drive December are quarter, leading free quarter. adoption opportunities in management. and to expenditures at acceleration and of compelling strong XG on mobile year flow CapEx to questions. projected mobile. $XXX helped development operator results call emergence flow, will and we expect including the expect address future in record remains expect We the we're from growth the back we than cash over fiscal we and position ever fourth decrease CapEx value we and the of $XXX a the of We've of decisive strong. take RF our in and in in on of multiple year IDP's ongoing our its quarter taken we for instability, infrastructure free of for achieved smartphone to headwinds outlook and actions to Qorvo cash programs support Despite macroeconomic remains the increases. earnings and 'XX. fiscal and advance performing Things. volume these summary, all invest continuing ever In the and in mobile earnings to for flow content I in have, positioned growth markets we IDP

Operator

from our first question At Thank Raymond with Caso Chris James. Instructions] this you. we'll time, take [Operator

Chris Caso

Good about cash changes of what's first about, walk standpoint Thank free go guess margin as question evening. those actions? are I gross what from in from of you. could I Yes. of that? talked question that's included minuses some you the and offsets of is those pluses the assume manufacturing fiscal that the year through that from the and of and the cash we impact margin Maybe the you expecting impairments target? first a restructurings I And then through your is sort guess flow there, you

Bob Bruggeworth

let Mark I'll address Chris. Thanks, that.

Mark Murphy

Yes.

So, accelerated GAAP out I the the The that costs in items, question, the the laid depreciation Florida. on associated good on Chris. principally decisions charges non-cash of charges, majority are with principally assets, those

the So non-cash. are vast majority

costs pretty out, those preponderance out have again, non-cash, for terminations, some Now, cash. through ongoing continue December, and until should rest a million modeling cash for have be But to of for of of it Branch. between the the for early the those 'XX, then, the over clearly $X quarter December, our is laid tried Farmers you'll then, guide. March million go-forward around you the will period costs Farmers it headwinds to fab have then, Branch now, in decreasing of experienced $X Q to -- fiscal 'XX see $X are basis, yes, and year free should assume Florida, and quarter course, Right million this and flow I through million Florida. be those that reflected continue quarter been up. will On through started per per the but but the because in I've charges past which we'll those the in will $X believe you December, us lay assume million on 'XX year, which for modeling $X fiscal basically And of should added will

Chris Caso

right. All

you much don't is to it how that, the it actions? take that of perhaps reaction the just take XG And is take that could you us them follow-up forward just thinking a know through it to perhaps state much you caused of the of and is How a market before hit? conditions lightly. as that of perhaps realization looking I market the how Okay. current these the actually much to --

Bob Bruggeworth

by Number you, our Bob. how team has we've much We've the about one, bring being SAW function and facility. consolidate done that in-house a and just think, Greensboro had been the I with talked the and lot that it Chris. the things, some operation Thanks, through of previously the that work being in good able given Mark great is up it really in and us now consolidate charges to some done about of team, a work talking being capacity was close quarter, some in of time able for Florida. costing to some a went

be still put done of plans lifing that support bring as those Mark XXXX and the a market the will job at it excellent and We it's an capacity. now for our lingering on thing replacement through we I us at been of cycles, we're in thing overall now what's made from up to delay that looking just also just smartphones, the sense the with programs given the it's products handset team bringing out within to well realities believe Farmers that us given smartphone a right bringing but manufacturing has the It in few right going end volumes We're yields. what pleased out. got was there demand and the on, laid outlined. we've going in real the factory that Branch, the to they that Mark On it there to with as footprint. up, between pointed have the up I the are think in team with went looking right

Operator

Blayne Barclays. We'll Curtis next to go with

Blayne Curtis

pretty from my a mean, a the weak, are question. smartphones Thanks but high any for just Maybe drop level, obviously, taking sharp in March. just it's color, I

was us to then that offset, way give how you socket, color? trying can much but any mostly us China, And to I the can just shared of if you is it's if mean, for think you? any is there an of Thanks. in through. terms I'm assuming offset walk So that about, and gauge

Bob Bruggeworth

taking China high measured a customer as At commented, real down, look Thanks that. last this we're we again Blayne. down a was we down Yeah. it our are at seeing level, quarter, largest quarter,

share as as Huawei of talked back offset to we we've but seeing and and about going at back been along it's three So talking about. expected, be growth quarters, we've it's in have by playing out see we're Samsung for than tremendous for to gained down quarter more starting come that's with being the -- also that really this expected that kind growth about we're we've

couple So you those a things of are a pointed offsetting pretty steep places. decline, actually as out, other in

Blayne Curtis

IDP been mean seen XG double-digit you kind you you've just of I are you? of much Thanks. mean you been just I growth, couple some last as for for understand of XG, the nice curious, what if of about some quarters? over of saying big can early is impacts big how curious today pretty on, think just terms this stage have in kind how has within

Bob Bruggeworth

James, take you to that? want

James Klein

have like a the the we've Yeah. team supporting and revenue, the business. that had to that opportunity record wouldn't business. great We Great I'd and the functions And it IDP take the question. built before team I without to answer, great support quarter, recognize the happened profit record

I our bringing just several are massive We amplifiers. say and and we've to of new the and the see XG team. these to about excited ramps GaN ramps business. of technologies customers the thanks at to MIMO really been product it's about the what opportunities including We're are want antennas power talking So

we're As stations stated, ramping us these GaN, gains RF in the MIMO. the support content several each customers Bob the also with content approximately On are $XX,XXX significant, to base for deployments. of

to a X.X support total, production and have $X that It's in opportunity Today, opportunity $XXX us. about In million in or products $X for for XXXX. in us million XG will We billion that market XXXX accelerate billion a represents gigahertz. $XXX volume and X.X, X.X

Operator

go with And next Harsh Piper to Jaffray. Kumar we'll

Harsh Kumar

could think is to XQ make can puts a meaning or it ask China, too yet? Thanks question. XQ early large done in that customer assessment, a and all guys. between I in you XQ. us your there ask calendar to Hey, that for takes you Yeah. me is chance it grow for Bob, is letting fair

Bob Bruggeworth

questions a for that. early call difficult appreciate you the difficult I asking Harsh, to call, in the it little us so is

in I back think going China to think some. I but the we are too to to start soon is quarter it happen is expect March and being realistic do to a in little what we call, come

are As healthy. Mark channels as I inventory commented pretty and did well, our

think and continue them to we'll some as release So to new that's customer, again phones, they do. and largest what be to decide just I they're let clear, ex-Huawei our going

Harsh Kumar

China That's us a have go factor a if then fair. compare I any to color and tried contrast can other, appreciate bit? and in your on current they basis, one that. did quarter, guys down thinking the And both in -- you would give on your large the March quite did just percentage a versus was quarter, customer, bigger the relative it or than you

Bob Bruggeworth

let's having say, a down look really at other March, As both because at we're two just nice they're we ramp significantly customers.

I at think I'll leave that. it

Harsh Kumar

Fair enough. Thanks, guys.

Operator

We with BMO. next will Ambrish to go Srivastava

Ambrish Srivastava

little a we just Thank you're of talking how Is earnings was free terms I free 'XX? fiscal to 'XX are press in should or about fiscal in that flow. about release growth -- much. you what referring to in typo wanted I you cash flow surprised, growth cash a thinking very be and the

Mark Murphy

Yeah. Ambrish, this is Mark.

end to $XXX expect we free year, cash million. this over flow So

into year-over-year. in on going year us to make on fiscal fiscal right market. 'XX see, lot a a consolidated the do We detail, up But XG for don't we the handsets at detail drive both 'XX the too to are cycle, of planning as in provide early little mobile earnings more we in just really want a so as we RF just call. there greater We sense now, think, is is but and we flat, see in slightly line, the call that, to but at of are top our very believe it. side on mobile impact we'll flattish where just in strength the content, you go too volume to much early handset flattish being But a May to level high level give and I

Ambrish Srivastava

sorry, No. That makes -- go ahead.

Mark Murphy

Again, taking as continued year Yeah. thrilled out see and what see IDP to to because earlier. still in gross revenue. laid going too see actions next gross growth we we the was that it, expanding Farmers next I nears billion cycle, planning we we're call do just even and with to going our Branch, $X we say, reduction help there year as in on which margins. Florida a but early business Cost burden are with margins I are of

Just give and seen of us on from trying fourth be margin. gross profile to quarter, you from a to before, first sense going to this are quarter we down you've

XX% what expect -- year, the should the and we but be first see to to mix, gross loading the we on So below roughly to rest the back be in and you related saw quarter we margin half year. that's of in back of this

flow, next be On a margin take changes, hold, control, had progress OpEx, $XX the and expect cash expect nearly to great X% -- on we've years, finally, modest capital focused in the if and any, right the investing year products technologies, we've Last Free compete, have right year on continuously portfolio been million to we go forward. as improving maybe over margins able make see these see and and operations, as we $XX changes in a but about will from reducing free and markets -- be which flow. growth we intensity. cash to over we've we and gone up free XX%, business we targeting up we we tripled CapEx, slightly great how in to in taxes feel move over gross of and three So bit. we and million expect be selecting the our cash it. flow to just

Ambrish Srivastava

thank to tough too be you. Mark, want you. don't Okay. And on I

segments, why and is sense we cetera, quick Thank the You where across you've flow IDP. comms, of here. -- is bit not you just then a weakness if mix on it one on a Give are you. metric, follow-up are that us the hearing have to seeing much XG, since for free delivered your sales drag, cash been between on diversified et business so seeing that? Maybe any? Little

Bob Bruggeworth

challenges Let talked and about cable me a that's and strength in the I broadband, and driven TV station strength DOCSIS X.X been also business, strength first the talk about that couple our in we'll talk business. Certainly, of the strength seen seeing base about the in the our by deployments. business driven by XG. We've in really

the for drivers growth nice both So quarter.

On the unrelated been of standard has found in outside several their just has good still lumpy about factors do business -- years. general, relocate release, based in some starting It's production recover there but shortages China, as it's of tariffs business is up really impact bottom our and defense is that that back. side on for a AX and the up end very and our headwind talked underlying some customers to believe on having then, materials WiFi very, defense some last are One foundations and was manufacturing delay the we X our business quarters down in and there. its we large as been or growing, we programs. quarter, And but of is WiFi

Operator

with We will go next JPMorgan. Peterson to Bill

Bill Peterson

of some I talked Obviously, drags, mobile. want diversity in probably understand to the question think more should seen as in the the unit we MIMOs. about first kind opportunities but areas And in on ask XXX past such receive, I Taking you've we question. a tuning. guess [indiscernible]

but the these help XG understand really you to -- 'XX, fire be year? think opportunities this be obviously can a content guess fiscal going gets they are presumably us in or are about I beyond? can should that opportunities certain presume following gains we as but see more they how year, the headwind, So I should in really you

Bob Bruggeworth

question. excellent a It's Yeah.

to highly six more for of we're the integrated right, in great of driven you're architectures. design our and of still see tracking share ones, as the market, markets, in antenna That's power important with be modules, complexity adoption be into trying we our all especially manufacturers handsets. with top well to by enthusiastic add fundamentally And us management and radios to and So a in a production is and tuning replacement Envelope investments very module. continue mid especially area BAW-based of the we very will about band XG. integrated the get you as handset to sorts high the today's going more industrial

as So market Advanced really The in is especially And slowing of pretty MIMO, of at units market high-end to trend, least, quarter, we're of that market the XXX the content. and we overall that LTE been last what a great, the in, more it's comes are course in that's handset saw units levered have it's, headwind Pro flagship or the the of and even. smartphone than soft additional the as that. lot models course, is overall,

XG there worth is a of about In caution I a to ramp backing little it's point, billion that $X So 'XX, our due on in where and market think 'XX, of clear 'XX very in handsets. we not additional see at Day, that's during to we're mentioned, all. calendar but your down we calendar Analyst XG

growth in a path So clear despite to CY the we solid TAM in calendar 'XX. challenges 'XX, see the in

Bill Peterson

and forth, as for we think in about look the local expect You and apparently in about puts have year Thanks assuming automobile IoT, frame And James, year what the range, we and some -- growth the us If opportunities? XX%, performance back, But about coming growth wide other short market talked you AX the the is calendar or Okay. year trying fiscal can area the help XG past XX% of 'XX, should takes. that? to how for 'XX a this understand of so out should talked Qorvo's comes for to starting, fiscal you for we growth of have eventually, kind that. area you

James Klein

Yes.

that just So our of row grow in to a the really proliferation in those We certainly quarter base market We're of just double-digit general XX% what for MIMO the believe are We've XG like hit to trying to and quarter. driven Bill by then arrays we've XXth about. come defense, adoption of in station. IoT. growth. that talked range, change going no do phased things into again underlying XX% markets still And to the underlying to massive coming will next

we'll markets think, underlying that to those see not XX% I'm and markets. well in as that, better, still as I we'll if do than XX% So growth confident that underlying

Operator

Company. to with next Rajvindra Gill go Needham We'll

Rajvindra Gill

of on particular and how my there Thanks questions. ADAS I competitive it. that IDP, for A you're a the sense differentiation the thinking appreciate want self-driving and for taking on your particularly growth question I vehicles. about get rate to segment?

Bob Bruggeworth

take automotive, on how you are James, you question the the want doing there?

James Klein

Absolutely.

So, all those radio, a to we're XXXX WiFi, really get co-existence we satellite OEMs also we're and Tier $XXX trying heavily trying filtering. RF about Today, or with multiple into we are to and engaged DSRC, cellular radio as SAM X, that LTE/XG, ends, front key into million move multiple Xs of really and across areas, spaces. VITA digital and customers support represents different

I still think early relatively it's in.

automotive the enter the be big year we will XXXX XXXX into models. uptick as into for shipping market, car definitely are and We us but

Rajvindra Gill

a just margin. gross the follow-up on And

it you're year. this on gross particular done, up could bit of So in the it is the second there process that, maybe and little will to margins elaborate Wonder I can in one the starting once loadings expectation is think June, margin expectation has you it second in been ramping mentioned half? a ramp was half ramp further below that where that XX% that an of back to drop of at you last the fab, discuss about basically, then, was if

Mark Murphy

Yes.

excluding We Florida the the forecast. with and are every our hit hit XX. the had, to December been We've on thriving we've we've been since way miss -- by we've experiencing we do all margin forecast to business that gross along very accurate hurricane what ability

year, of the we the in cost margins. are of mix end lesser the of year profile clearly at period year, at products the beginning the Farmers effects, back the about effect those Initially happening minimal. So outpace and and businesses. the revenues then, costs, see the of lower those a the have His feel Branch early our the continues business, and the great of then, and part in business to overall effects year, understand then that have effects mix just in we James' and until to ability period addition positive effects through the we the we what's market have both period cost

clear capital a to progression in margin footprint. we it's about year-over-year. we've And expansion products, right read well of investing of believe the continued operate gross on continue an So our and minimizing got,

Operator

America. Bank We'll with go to next Vivek of Arya

Vivek Arya

of year content my the reclaiming Thanks Bob, last entering filter competitive for has one taking the talking the competitors your question. competitor the BAW and times they about now other is that on market. landscape, mentioned about a few lost

phones is the insights the and content any So, around visibility your just landscape? competitive I'm how in just on flagship curious

Bob Bruggeworth

to Eric, you want pickup that.

Eric Creviston

Sure. Yes, the quite overall about in enthusiastic we're our still opportunities flagship space.

level a engineering There's be to we're all a lot on be lot these which opportunities, we order mentioned, integration two in the of and I we're working get our only and high of high now We're be right to space are filters. enabled here. and in to to band by by multiplexers, As driven this fully positioned or hard to BAW scale frankly. heavyweights competing at a done. playing products mid field is are There's well really developed one the performance staff able high

going is potential how to Regarding within this there the be people new trying continually of enter market, space, that to that going is, entrants given margin it. are in growth in attractive to the course, segment so

lot years enter get band integration needed remind filter just WiFi and a over integrated the so high going multiplexer product forth many space, other the you takes then to to as of it will phone to We order highly opportunities discrete well, the of how a a all but technology involved duplexer, find high it all forward. filters other you a really working and and are mid to and there from a and

fully great a engineering So, trying it's build space, to scale opportunities. step a we're our to get capability up those

Vivek Arya

up, for my opportunities of XG to to get the really we that start see before you do IDP maybe of you of the cetera, you, to handset strong think the for built And benefits opportunity as success set a been et has it. follow on more see into Got M&A, story expand infrastructure side?

Bob Bruggeworth

do your Vivek. work M&A talked, outlook business I in appreciate under IDP. Yeah. of the is we about doing companies think, consider And And bought the Thank have kind that to an you, calls IDP to and in team we've solid deliver the past from James results. that words many support

We will look and mobile, bring other companies. as In continue technologies look opportunities we of to the at to well as to in do continue area so.

better want create will continue and we that very so. we do to and can funnel, active we at we day, but owner deliver So we in have make shareholder value the sure a the end we're bring believe and to of opportunities we

of good far look. we So continue we on did couple to the a so very and will job these

Operator

Goldman go We Toshiya Hari next Sachs. to with

Toshiya Hari

for Thanks Great. taking the question.

beyond. the competitive potential think to about do at you obviously they time partner the for vocal standpoint? guys, you How gain close have I guys XXXX that RF pretty been Qualcomm a content their ability same into risk think from and about

Bob Bruggeworth

I tell company. will you, Qualcomm's great a

to have mean. I pointed cellular, there's, address it's let you more work would sit products of that, As so lot out, do that a WiFi if beside we like whether than you we or Eric, them, with do a I'll little bit

Eric Creviston

Yes.

it We future. of continue market a in cases lot together right. to do you're the think go will I and in

separately about that baseband pick see integration. choose OEMs look they the three market, We XX% component tend it's and at RF continuing. the you and smartphone and that of the If the top and to do

So in baseband tell designs. our I the can all know market, other our parts all integrate customers that working onto you aspirations, to the with of they of solutions have are but I suppliers' us

Toshiya Hari

Great. follow-up. on a well. And margins question as a I then just gross had as

March So, guiding Mark, I essentially think year-over-year. flat for quarter, you're revenue the

I points think your basis year-over-year. XXX gross about margin is down

year-over-year, -- growing IDP be positive which the mix should margins. is for gross mix think I the

or on is there, just rates offset So it utilization I guess the the you. there going is Thank pricing front? something what's

Mark Murphy

pretty the Florida share. and it's easy effect. to Farmers Branch it's Yes, Year-over-year, costs period

March of $XX and that total of case So so the around million in $X in Farmers the million, $X quarter, year-over-year. at Florida in headwind case million Branch, of

Toshiya Hari

pretty pricing stable? is And

Mark Murphy

generations of pricing those space, number we down integrated, of the in replace margin so to a electronic in on We're products. products work more goes better future more advanced, and

Bob Bruggeworth

So stated normal pricing the no differently, in change environment.

Operator

with We'll go Research. next Snyder Charter to Equity Edward

Edward Snyder

at superPAD win minute, Korean largest at leaving Eric, customer. just lot. aside a announced you for big your a a Thanks customer your

in You've Huawei. at BAW, got more prepared superPAD which gains coming the

fall supply and Farmers year into for the we're of last You BAW being until X, deployed which yet products of we the talking There a 'XX. about Branch year. mix calendar were couple BAW moving taking a next into lot were Phase is of the out since

cetera, half BAW-based would the my revenues scratching with the if DRx I move am am all of head still even of I am table your on I China for would missing Farmers one second down, year now weak, off have mix is improved Branch know guidance but I volumes and have what or missing? tepid something, significantly expect about the big et BAW. wins. BAW in that unit been So, the these

Eric Creviston

are So reevaluating the BAW-based point for entry regarding that. market we area, the actually, in the

As programs I of mentioned the tremendous a main mid earlier, we're just in to the lot high path. seeing the need and of staff

which there now entered to now variants that variations all can new six and there next asked is basebands we're we've pair and to. imagine, are coming you being many top OEMs, for along, As the a generations with in demand

any opportunities. business nicely. we content That year-over-year one So, in BAW-based though, grow there Branch our timing sure The exactly your is to lot Farmers if point change. of and we them. when very need fully upon exact is a amount down products will, staff make we be BAW the doesn't depending To going is to to of are of and of doubling those can you done work there

Edward Snyder

the are James, Okay. then now. in largest right GaN world in you I if manufacturer the could, military And the

commercial You the are here. the now of side moving business into

and because Marvell broad-based weakness to seeing else. talk side is of growth business, an to, You TI XG How your about much question everybody a that from lot alluded cellular of infrastructure. at everybody to the just especially earlier as GaN

got of product. you've that you're it, not is you've that GaN seeing been and kind world two but supplying other drive, maybe in unique only You're there to or then and one the guys

idea is of get I that much story? from an how So the trying of to way -- strength just -- in know XG military coming your I'm GaN

Eric Creviston

very and inside in And remains to the into market multiple for the whole like we us the of ramp, is that's base as well side earlier, of macro in what in starting the significantly and chain I OEMs. are Well, drives of about $X,XXX do of products XXXX. the right, position Massive But RF those a MIMO well that and the all rest MIMO that XG so you driver and really in things to strong over potential Massive expect up have across number LNAs eclipse that switches nice ramping channels and defense in GaN. ramp frequencies we certainly talked it very position also also are will amplifiers, We content station antennas. channels actually products

it to shows a it growth say run rate didn't see So I And there. $X line earlier, a you do I little of we bit but sight of think the rate. billion

So that's certainly the journey that we're now. on

Operator

We'll UBS. to go Timothy from Arcuri next

Timothy Arcuri

number it's first of wondering China that what last XX% I'm I products March? what going to think Mark, is, you December think, be Thank I was, for and for guess, much. ex-Huawei quarter. the very maybe you was mobile question

Mark Murphy

for revenue Company, then, in in sequentially China. ballpark, will and the be XX%, business Still we China year-over-year. down the up Yeah.

Timothy Arcuri

products, about right? Okay. And mobile you're talking just

Mark Murphy

in business about quarter, both we year-over-year. I and products mobile the now was Mobile is whole. sequentially fourth as also down XX% the the of will talking coincidentally be Company a and

Timothy Arcuri

Okay. Got it.

Okay. I second XX% so? And then, quarter, did you have customer a would this think

Mark Murphy

did. we Yes,

Timothy Arcuri

Okay. Awesome.

Mark Murphy

we which 'XX 'XX. time comment a three fourth have then make to had the of customers, or I'll was have March last March that in of just And that quarter expect quarter actually we we XX% --

Operator

Morgan Hettenbach to We'll with go Stanley. Craig next

Craig Hettenbach

you. Thank Yes.

Just talk had well last of continue going PAD. to terms you mean future phones phone, year's type as flagship as on can mid-high And you the upcoming phone, the forward? in that momentum, traction I ability your just you what think about a and in Samsung about visibility of have if question band build on I

Eric Creviston

Sure. Yeah.

momentum. technology design We We feel no we have obviously a have lot handicap anything. of of that confident

across that support being as favor multiple basebands The parameters increasing. technology. I We to asked have complexity performance is customers. got we're multiple mentioned, our And certain

our filter challenging to of modules. do, to of in light integrated OpEx work lot our keeping in up same BAW time overall -- and capability highly there's and environment, the course, So bulk a we're design of the managing overall the at check around in

lot coming So, and for coming as well product enthusiasm that diversification of of customer category. a lot diversification in a

Craig Hettenbach

Got then quarter the for doubling are cash you And you follow-up in with about buyback it. then here? can and talk pace about last thinking the nearly just of quarter, authorization just how as a from or remaining Mark, deployment

Mark Murphy

Yes.

Craig $XXX So outside million. record -- in repurchases had quarter we of we ASR, had the the

been four the three have largest quarters out ASR. of outside I think the repurchase three the periods last the

shares. that authorization, stock $XXX level continuing And continue expect of flow we buying frankly, see cash be under just down have the free our in back to We the that to business we being at continue progress the a we working strong. to price the would left see, as make million

course, tabs is at continue look we and you a of continuing function of to environment as M&A, and rate many keep pace the to know, Of the factors.

Operator

remarks. like I And at or turn would for call this to the back time, over additional to management any closing

Bob Bruggeworth

thank for meetings. with investor Thank We tonight's speaking hope forward want to on you We a to call. look We to good fourth us you our see night. upcoming everyone call. joining have quarter and you at on

Operator

We your conclude today's does you participation. this conference. for again, thank And

now may You disconnect.

Qorvo (QRVO) 7 Feb 192019 Q3 Earnings call transcript