SWKS - Earnings call transcript Q1 2020 | Skyworks Solutions, Inc.

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Operator

Good afternoon and welcome to Skyworks Solutions First Quarter Fiscal Year 2020 Earnings Call. This call is being recorded. At this time, I will turn the call over to Mitch Haws, Investor Relations for Skyworks. Mr. Haws, please go ahead.

Mitch Haws

Rob. you, Thank and conference everyone Skyworks' fiscal first Good welcome XXXX call. quarter afternoon to on are our With President call the me today Executive and Officer. and Liam Officer, Kris Financial Sennesael, Chief Chief our Griffin,

we Please will statements that refer earnings discussion are to I that and be may future include like remind our related to Before our everyone begin, could considered our or Annual on results press actual to Report expectations would forward-looking Form release filings, and materially information that recent XX-K any made differ certain to including risks from forward-looking cause SEC outcomes for adversely today. on and statements statements.

Additionally, past Investor of our the non-GAAP our practice. include Please complete discuss Company website refer Relations section for press guidance to results the we a GAAP. to will within with financial measures reconciliation consistent our and release

to With that, Liam. call turn the I'll over

Liam Griffin

Skyworks and a high-performance demand for welcome Mitch driven expectations, Thanks, by everyone. December global solutions. exceeded connectivity quarter

results capabilities of As accelerating of our leveraging a and XG SkyX end and technology with broadening the customers. highly along vertical platform, adoption markets across decades advanced scale experience, of our set demonstrate, Skyworks is integration

live, at the and Smartphones revenues X% And transport, tens outside in gross eight early in streaming substantial we've shipping up Currently flow sequentially. of age uptake devices per XXXX. of of calls, person, high represents share devices smarter expected cash But a XG-enabled more connectivity, volumes measured totaling to richer, number is this recent this higher an a of new in unit be guidance more prior first level XG usage catalyzes detail. and novel play will will to high-speed ahead transition households things connectivity intelligence, cases our approximately and That XG emerge. in by of produced and And trend there importantly of as in We time, world Skyworks XX% media noted autonomous educate. the XX US rather as to and to truly ways only operating a of quarter. than accelerate incredible margin a climb XX% over is percentage we upon where posted $XXX ubiquitous leading more mobile with devices definition now billions. grew devices rely an to of million, Clearly continues expect At traditional a operating and TV. $XXX example, XX.X% increase. ushering quarter. are convenient enabling exceptional by per that work, are networked earnings quarter sequentially connected this subscribed of we margin pay as looking We artificial Now service million XX.X%. IoT, in $X.XX, higher generated grows and And US, are to from streaming the our and a media. adoption markets $X.XX seamless,

delivering range It a of rich this ultra-low Skyworks not Recall pivotal designing playing a greatly of customized standard enhanced wide becoming latency in connector. fueling capacity gigabit universal highly and in not a network brand and solutions. offers the deployment is applications, slogan. technology, or a XG with is XX-year speeds, a system role a integrated while the and heritage product, a

resolving categories, the XG. a gains demanded customers preparing leadership technology across performance demonstrated vast of our increasingly and complex have for architectures set We critical product in

both design segments. expanding ahead, Skyworks broad look we momentum generating clearly market across and the mobile win As is pipeline at product strong

Vivo, in business launches Specifically XG gaining powering is in SkyX Oppo, Samsung. Xiaomi mobile strength traction our our platform with and at

help SAW chipset spectrum bands. and being our and with customers deployed capabilities Samsung our wave, complex expanding interoperability Qualcomm. X and solutions suppliers, agnostic offer filter TC while broader and we XG a extending And including across our baseband reach are navigate across of in Our leading bulk challenges MediaTek, acoustic

at CES, unique devices audio XG-enabled suite smart broad a products. high onto fidelity and Moving a Skyworks connected set Massive announced markets, of of home MIMO solutions, IoT, including

powering cellular-based Cisco, platforms and DoCoMo with driving leaders of we with certified launch emerging customer with and our our X SoftBank IoT ARRIS Aruba. including Specifically by rapidly applications NTT Wi-Fi expanding are platforms, the growth We're KDDI, industry Verizon. AT&T, reach Netgear,

[ph] and Ring We're low advancing our VXX IoT products emerging SkyOne range others. in with long supplying and portfolio automotive content many power, as

space bulk XG base In powering MIMO gallium cell leveraging germanium arsenide, is station its SOI, the small design capabilities wins. in and ceramic wave Skyworks while infrastructure acoustic filters silicon and

and leaders we enabling in including addition, Renault Nissan Bosch players and Honeywell, momentum with GE. are like automotive, In with gaining new along Continental, industrial wins

As suggest, high segments on supporting driving remain X,XXX thousands more and value diversification with markets these highlights customers. focused we than products, across of

business highly providing transitions. we both in technology opportunity multiple has are and So of Skyworks of meet our investments shareholders. summary profitable positioning end allows experience integrated the the strategic the to a consistent by engines connectivity across markets decades XG have returns customized Uniquely and across bolstered portfolio anticipating made performance early to that highly demands of connectivity us our model predictable finally, invest to the and complexity immense aggressively while us

discussion over our turn a and will for the Kris With QX outlook that, call of to QX. I for

Kris Sennesael

million, phones we above revenue first success million of SkyX Skyworks' of $XX flagship and was phones ramping XXXX fiscal early November, of XG our successful sequentially launch midpoint in of the portfolio provided by as $XXX product the new X% globally. driven and the the for the up Thanks, quarter Liam. outlook start

necessary $XXX a line up expectations. an million, down were Operating continued generated operating fiscal $XXX accelerate expenses investments of to was in the in with QX. we X% growth in of year-over-year while into to making prudently as XX.X% manage resulting the from operating We of million business. basis OpEx million the profit income, points XX.X%, XXX margin translating future $XXX gross of Gross quarter margin first

X.X%, earnings per sequentially. effective diluted of XX% or was up million $XXX and share income driving was million $X income Other $X.XX tax of rate our net

Turning to balance cash flow. sheet the and

First of our on operations free million. translating million free expenditures resulting capital a We fiscal XX%. million flow in stock for of $XXX flow was from revenue paid repurchased $XXX flow and quarter shares XXX,XXX million $XXX in total into of of $XX cash strong $XX cash were cash million, million, common dividends margin $XXX of a

ended no During our have the of back program. through first returned flow a share we the buyback months, dividends have and investments quarter combination of $X.X last XX with shareholders debt. free cash cash We XX% and fiscal we of to the and billion

the of XG our wins the of launch our as quarter. QX to broad solid on for momentum ramp mobile seasonal driving design fiscal in March in we move let's are Now outlook better from performance matched in than markets with XXXX. business Early initial traction

to For revenues the we midpoint flat the would revenue be of range, between be year's to $XXX XXXX, QX. fiscal quarter of anticipate $XXX our million second At the million. last and

excluding mid-teens However including revenue in 'XX, Huawei year-over-year. be is and to second the quarter or Huawei, up of expected 'XX fiscal fiscal

gross rate margin income Below expenses the tax approximately operating between expect other $X and a anticipate and and XX.X% XX% line, of roughly X%. We in of we million $XXX million.

share the diluted to midpoint our deliver per to diluted million $X.XX. Accordingly count earnings we of $XXX ranges, reduce further to approximately at expect of We shares. share intend these

the turn over I'll back to that, With call Liam.

Liam Griffin

fiscal Kris. XXXX. Thanks, Skyworks to results start delivered strong

growth cycle expand. XG with the connected are we things gaining innings in the people technology a continuing of multiyear ahead, of and early momentum Looking and to

results operational We crisp transition advantage. are value. technologies execution same positioned strategic through in we we the into time and fabs have providing uniquely of competitive aggressively strong shareholder ahead our model, invested this long-term At with a business these and translating own crafted are sustainable

That concludes questions. Operator, the prepared open our lines remarks. let's for

Operator

from Merrill question Lynch. [Operator And the from line Bank America Certainly. of Instructions] your comes Vivek of first Arya

open. Your line is

Vivek Arya

my congratulations the strong and sector recovery taking for guidance. while. the Good on question after see and a to in Thanks the results

I had So two questions. Liam,

the of a I'm winner-take-all the you initial curious much on you ramp. direction in that have is content some expertise of in it mentioned or these wins And How you in First, integration. are components Is you mentioned still just ramp think you XG And in XG of are share your kind just I that the smartphones? these quarter? maintaining specific business. of in? of what kind the are the seeing the that you March seeing of roughly start core

Liam Griffin

also Sure. it Well, difficult we highly believe rollout these of We're prior phones way we've absolutely continuing with the with that even number things about of We're in in China position and right these going XG the across XG calls, seeing of that devices now very the larger with exactly players, the we're really customers, doing new that We're in the their that crafting wonderful what phone number phones. to share been haven't we're and of into seeing our at are to gaining launched platform. complex see. share Samsung then SkyX talking gain want we XG-enabled creating US leading a position in great and a players some are yet.

there lot momentum very So we're there's of a about in the and second we half. -- going upbeat feel positive where very

Vivek Arya

strategic And Got kind of question. it. my is follow-up a

of think in a the should might customer, been about for this that those Just competitor assets we capability look for interested curious a your your developing time, have what's sale. you some competitors the those you consolidation So of at? taking internal I'm on potential RF are but ball or assets their potential a sold be if impact impact to assets get Skyworks? or up put one something how kind of

Liam Griffin

the specifics question. see the now in our happy really but we're we starting the business and get tremendous with accelerating. in opportunity well really aware just there are same Well, and momentum that any Appreciate we around really can't you XG time we into opportunity demand suggested, of We're our at organic with the sure. just Sure, M&A. a what doing

pleased flow that same have anything comment and have powder feel can't but we at when we deals do say But the deals it, point, this at necessary. the about time So I'm to really on specifically. the and cash to to M&A are at just we good opportunities look we

Operator

comes the Arcuri line Timothy your UBS. of from next from And question

Your line is open.

Timothy Arcuri

for can the about so both Thanks Kris, you for it us for businesses guidance March? you how much. the and think give December for splits

Kris Sennesael

Yes.

with with So obviously saw of then and mobile a of the year. with is in Keep mind quarter of business the December quarter typically in quarter phones. XX% December our business last strong markets broad ramp what customer very our was large lot revenue. a total line we XG approximately that is in That

revenue. of XX% total was mobile So

and quarter and March growth year-over-year mid-single course bit Looking to that XXXX. in growth This some We mid-single expect is will broad little further second markets right. some see broad stronger mid-single in the digit markets sequential growth where the a then flip, we business -- our a in quarter. quarter, stronger broad yes, is half markets we do of into forward a see March of the in of even typically

Timothy Arcuri

for can I thanks sort about Great, ordering? bit impacting what's out what that think is customer, playing how Thanks. you you might guess Huawei And But they and think might ended as customers Are it better hard And How export a the million. do how expected Chinese pulling? that. how how talk and did restrictions perhaps but $XX customer a about just be double you and -- out? other how my not is change about you little your and how that. it are about do maybe them pulling? was play of than they that think that up it just

Liam Griffin

a an really in of what of it's Xiaomi evolving ecosystem business even Huawei, some some can has and and situation obviously, we course, been the with have Vivo, China supported. we limitations Well, dynamic on do. Oppo, MediaTek Sure. today there

can't in QX provide you exposure quarter-by-quarter gain we outlook, derisking business. we've expected. to But we a financial we but in Huawei going I everything as wins. forward. We're in go we But the that are do a our the to will can As little better that Huawei after We're share customer, still when frame than in tell will by I the derisking the came said are available. bit guidance design we say to in going it's past, we that time

make that's the want that to sure to we So investors. clear

Operator

line And your comes from next Hari of question from Goldman Toshiya Sachs. the

Your line is open.

Toshiya Hari

within have Then your the customers. Is on congrats you guys, Liam, the a pause I of the and the about markets. have infrastructure with was activity back I Skyworks? that was couple if and sort I how quarter? business you. bit of talk year? of half broad little And the into Thank in And of the drag strong peers it a much hoping your a to of Hi outlook more QX case thanks the A a guess so, the fiscal results. importantly, what's for follow-up. on part in talked taking question could the

Liam Griffin

right has I its mean some in the XG. the like it's in Sure. Ericsson opportunity. very of up and some changed terms there They there as Yes, been I obviously it's in think now. infrastructure of element players well. and opportunities bit slow it's stepping a but don't business Obviously necessary know are is And really Huawei an have Nokia but I limitations, little a pace,

So I see still infrastructure us. space vital for very the

filtering we with ceramic some we do there mentioned, our antenna of So arrays, including that filters. incredible the work solutions, MIMO some

We margin So the markets. area. for infrastructure industries. would we But second how I that we pick It's operate a those across of role year. positive and us in have have half the know broad role in a necessary in up to a driver expect to also

very have relationships customers. good the with We

climate So second the a half. in we should better there expect

Toshiya Hari

year. great. On call is guys margins hitting about it. as half-over-half a talked basis? and so, if one the your half what for last wanted of were this you. potentially in drivers I is a gross to it the the [ph] your then That's follow-up, And back of Thank Got XX% the confirm key still on you target fiscal case Kris. some just

Kris Sennesael

Yes.

pleased all, gross execution. I'm of with First margin our

we what the came in XX.X%, slightly December above in quarter we at So guided.

half didn't the good our March And in towards were target, very XXXX, up XXXX, of that in going we improvements going our XX%. make towards I last then are at despite the time of slightly at further continue say March to longer-term margin I goal that normal so, decline the target do longer-term gross And quarter. back of we progress XX.X% to to XX% hit end of but expect XX%. in XX% revenue And guiding into seasonal the quarter

Operator

Curtis of And your Barclays. line Blayne next question from comes from the

Your line is open.

Unidentified Analyst

want you this is Hey clarify, March. comment to for quick. markets broad Blayne on real guys, [ph] Tom Kris, I a into Curtis. about just made

You to digit said sequential you is up originally and clarify or be year-over-year? growth said just then going that you was it digits mid-single year-over-year. Could it mid-single

Kris Sennesael

Huawei, Huawei both, excluding Obviously, all it's as most lost that it's ban mid-single that. So as or digits, so right, digits year-over-year some we of we broad business markets. due well it's sequentially almost of was infrastructure because the that mid-single part have to

even year-over-year back of I growth be And and then exclude excluding year-over-year so, growth, will if Huawei, stronger we in in March to second mid-single Huawei, potentially a digit the half XXXX.

Unidentified Analyst

on broader a them wins, do Great, pretty Clearly, design competition being modems? the that's does When helpful. guys question. fierce at there's there talk RF And the solutions. you looking about then XG, the lot in and you just a also particularly have early attached a guys that is with many are competitor of

Just of how do you kind how and aspect? compete you break there do down bundling the

Liam Griffin

the our platform into such and is drive XG our they Skyworks, solutions proof bring, where complex as for were customers Well, are are in around we architectures customers from that And customers in want capabilities specifically our more integration mean the Integration in SkyX than ideal XG. the pudding. XG. moving the I that Sure. solutions substantially

gallium solution, own friend how integration, that's we filter win. us. We're solution have every doesn't in. If the where and us and seeing you It's their driven looking like the are we work see you're sophistication to may way, we're test, small integration not companies XG the kind for to facilities by baseband foe assembly look customer from a a customizing that's all that today, devices of That they're customer that's they we provider. to arsenide leveraging crafting with and our the right a market work being right markets going from seeing for Skyworks. chipset going best-in-class a devices the at and the to solutions, that supplier, now. in of a not whether that And or now, from by what and take lead work want always level turnkey have But

Unidentified Analyst

Great, thanks guys.

Liam Griffin

Sure.

Operator

the And line [ph] your BMO. comes next question from from Ambrish of

Your open. line is

Unidentified Analyst

not -- business as a as to your hit may Looks not Liam, worry soon have buy started call that... not. that have about whether PR you. like you tape you that thank or you to Hi, may the

Liam Griffin

we [indiscernible]. Oh,

Unidentified Analyst

signed multi-year Yes, have Apple. with deal a they

on guys. for sort to of portfolio, XG for think me like does looks content Let you most BAW? portfolio just then you What the focus have XG? within your do in you gain your opportunity And where

Liam Griffin

of to megahertz right. take little gig, to right here. just spectrum mean a I Understand bit to XXX from look, backdrop just now basically X about Well, phones Sure. long XG are X.X a driving a

differently. you a we X on them is with that the to of physical the an looks solutions, of So space maximum want, in, them. our and all integrated budget, unique And customers, phone do solutions XG [ph] going all that their that mobile of X kind opportunity. action things it players incredible or want our current capture X solution roam in and then That's an craft they're continues choice then the say, work XG the opportunity, that at gig higher. for that's absolute each all give to markets to let's componentry they with drawn incremental And to these What It's today. add gig in spectrum, content. one

a wave. the added So in to We've customers bulk acoustic unique the Korea is customer when say, and have platform. very a different It differentiator now. sets we the we SkyX Skyworks could And that tool to in to it's a customer that's China. platform, from largest be do that

We SAW. capacity have in TC high

standard We SAW. have

it a opportunity makes big reach have it XG We unique with [ph] difference and our we facilities for test assembly given any and that under device. Really and the that in and us -- have lengthen stuff crafted broadens watch.

Unidentified Analyst

model If on us operating you the to just for was also Kris my remind try not. capex year, and changes avail could the And if CapEx opportunities, this what does that what is it do we through? so follow-up Okay. as to as or you OpEx think guidance and for

Kris Sennesael

top growing are terms operating model, we in and so the line of the Yes, business market. driving above

are value about will we do of our XX%. to or on a that operating operating Currently towards and long-term approaching so driving our above much OpEx an margins time, target drive on We of efficiencies products the and cash the added there margins And last the think XX% cash better flow driving I margin focused operational running gross at we're And bringing XX% we free is XX%. approach free high or can flow At XX% to get bit had same little you XX%. saw very you XX%. that slightly margin. quarter market

continue business, our operational in will arsenide -- with the as And our We to one question the We capacity our well package and expand develop footprint models. operation in to continue that. to think in your no those is back-end strengths to that's into filter invest capex revenue just is and that of Liam as the XX% sufficient fabs of we I about our our operation. explained, filter support. running there fabs, continue as have requires Capex we and what you course put or about technologies. on new And is technologies technology, to foreseeable future gallium

Operator

Morgan. the from from Bill comes question J.P. next your line And Peterson of

Your is open. line

Bill Peterson

Yes, to opportunities. Coming the the thanks back markets, for taking broad infrastructure you to question. spoke

get your is you for of infrastructure guess portion especially for manifests mentioned to Wi-Fi the that full to expect world progress how trying year but of market and -- back for ramp the really IoT. a large is half. weighted, fiscal into growth your and full the year, Trying kind the feel broad to you -- Of the how a and itself I course, Wi-Fi back-half

Liam Griffin

-- it Yes sense, Bill. makes no,

look total, broad a if want think you bit a to more of broad I So markets here. view I you little give in at

strategic These us with ramps Bluetooth, the customer. are X wide we and connect AT&T, industrial playing we're protocols So and last the great done with moving Wi-Fi Cisco BMW, work names Siemens, X, in Skyworks. some We've ago, new that our securing is in all Bosch, field automotive like to not And years The so wins And of and things to others. LoRa, a have, design also they We've GPS, those into Renault, all, some for into set second GE. now Honeywell, for, wins about two coming half were not reach with first of three with of just looking momentum. moving now opportunities all XG, or were Continental, got right. at Netgear. of gaining ZigBee, we're now for spaces; quarter got customers wins on are automotive. more we've Nissan year the also and really this Wi-Fi

consumer up infant of with things we've So lot and we're with amazing product devices some now, cool Ring, & lot really products. We've even with Amazon. of got of Gamble, Procter got some a lined monitoring course

choose it's for fact can really connectivity goes is to solution. it what's and into protocols, portfolio set from right that their end rich So mid-tier. Bill, with that us, we it And that levers customer we of lock key protocol But high connectivity. have to pick a the the our and technology the levers broad

that. feel many, really for good think momentum is many we going And carry we to forward that that years. So about

Bill Peterson

are camp have? the LTV Samsung? to important course know it you first wins [ph] you in bands you half that phones guess guess OVX, launched to Okay, year, of phones the speak the year, can specifically you this here call is clearly in wins be about Pro last design the thanks. in LTE-Advanced Samsung XG and speak And of think the that you the and OVX I guys launched XG this you But so are if I XG can XG to going ultra-high, I -- as forth. have really already like

Liam Griffin

absolutely. Yes,

XG XG, actually in is names. China of momentum early led a the So that lot the the momentum, by

position solution. in XG So, we have great

like we're XG this we these accounts. still So Oppo, XG Vivo, again and content incremental so with great Xiaomi. names But with XG, have is position overlaying in

designs. that providers. doing China MediaTek These with also but got in phase content one substantial position. an great chipset seven those that XG their early we is as later with where example gains larger some some players are the players we with as I We've design expect significant see very year reference in were moves customers named, We're well. that's moves good And of work well with the again all will solutions. partnering those position, some strong. really So

Operator

And your next question of Equity Snyder from comes Edward line the Research. Charter from

Your line is open.

Edward Snyder

lot. referring about clarify Liam, lot regard XG. we If content talked a share could, out, we ultra-wideband, to comments to most share with are Pro gains? you to not year, divide some some also bands know Thanks and we that a seeing which mostly I into Chinese of out coming ultra-high XG gains your know the last of your initial you one? is you guys the pure you're about phone. here. wrapping like smartphone both, the strong especially I'd if Advanced, in are they're of the coming the like world band new and only referring were that, products where XG to Is but the I XG, products nXX band, the XG into

Liam Griffin

exactly. Yes,

And a XG have to that to got and you but you with competition are is the you which with have nXX, we've that challenges have, wouldn't continuing that that point been you dollars of more we've making there and the semiconductors get lay phone see the and all to deal got unique other physically size, kind current would incremental bands, And devices complexity we're that more So you for we put here consumption, in the placement, nXX, more UHP incremental deal that there'd coexistence is more phone. into when as together. know, that a be products XG we've basically backward XG the then compatibility.

approach in in in but into it's there's together of So offer would as be that platform over But coming is we're out. platform that that complex in challenges to device position incremental those one the with with to to and a roll nXX, configured out can overlaying bands more putting Skyworks customer capitalize SkyX that the is time, nXX, really resolved it's a content have good XG our way a solution. continues that such some UHP,

Edward Snyder

you've And Yes. there. done well really

then, about part could the [ph] went we a that while. China of six a as let's talk for last XG, year. So phase separate the if

Qorvo As lot lot we part know a to about took the all a front-end. integrated nervousness of that going a there's of on OEM's because fully

one wanted carve filter change And that starting that they to out of is -- feedback you to got is Are extent? you band do guy. know BAW that's and starting I the that material traditional to then larger now well. seeing Skyworks your that We've how question, platform. and the low any very So coming program part along

there duplexers, to that, to actually out? You've or portion way got devices they over something are XG section Is long the have now mid band you that mid be able -- next year received to the offer bands a seems and the to of it some these to and high from is to have going kind being be to too. going but of path capture further phones so high offer the the that of performance or

Liam Griffin

yes. Yes,

to try both. me capture let So

on cetera. is the lower Skyworks opportunities So get you into band with low tremendous band a MediaTek side, with pad, opportunities, there when of the DSM amount et

with -- to still it's that going got expertise to pace we some path So a the to to there. be have some we're We've high the that be We're growing on to is high do, that's now here internally, space. doing right some but of performance aspire solutions, XG the When are task, band it a it. important. but but a the we mid facilities The and address to go a us, that's we grade, to the done we customers. We've frankly. going but on we're recognize band or you leading understand expertise, challenge, we challenge, and work mid some good help the the get in quite We do yes and facilities with achieving and opportunities. have UHP recognize but band players merits of will fab with lot work highest the work position ultra-high engagement

Operator

comes from And FBR. B. line your Riley question next the Craig Ellis of from

open. is line Your

Craig Ellis

guys. one question. on Vivek thanks to follow tied Yes, on into maybe execution, that taking the the up Congratulations on and for answered, dynamic. focused longer-term last wanted question that good Liam, I really

launch is out new XX of customers the with Skyworks historically handset products. So working on months

have the it's you up, flat? be it in funnel Is in to you're from extent in year gain flex content now that up things content XX Is XGs. the you continue like what next capability? gain one that as up? early to like or point for If with vantage getting BAW calendar your we'll try things versus mid-band your does the look that it So into of pads high-band be it and what launching would

Liam Griffin

Sure, sure.

just thing. add that now that. we new the right -- technologies technology be about that clear have content have in but have me one in let that substantial right our we we don't we So technologies to now have the everything, are no XG about The question XG going really and to opportunities,

one market complexity. XG to going implement, a burden the got BAW, platform, more talking we do, a harder, that bring great of for leveraging to in it's And device what So then this, on we're to helping important. that we've the can leveraging and SkyX really a doing about XG that's keep up. today step continue to to is all as us be now quickly. do else great, things the aspirations challenging but in more is things incremental The but out content leveraging that difficult further for bands technology opportunity to the substantially customer we're bring saying BAW us We the more, now

So there's a lot there.

We've in decades great experts about for these of that's enjoy is of to one experience. in ones customers' solving That's the the us through be and harder problems to why and the top players are because a position and been transitions. great talk This our them in putting We going win. to we we're able that. the doing for it's market

will We've role. about see technologies, that dollars this a talked in but going half ceramic, start there. it. of our we're play that So absolutely packaging and We're of the will year. presentations acoustic our technology, in we meaningful content bulk our But remarks have capability, before wave, of of TC lever to about opportunity all the content technologies these opportunity our prepared SAW second excited some that is all that we of

Craig Ellis

last content the to year guiding just half in seasonal. above kicking beyond here we're momentum which are seeing what in regards And in that to the with with that with you quarter in business of is the point second the

or is that So year just the you've early be above kind a you've able is of with visibility integrated to too think that mobile in fair consistently the it that have to drive it got, where can performance seasonal you content business where to got are? from

Liam Griffin

that is to us, wins that Yes. difficult for design what mean let's But where have seasonality shipped. be. are. it's opportunities we the Yes, to natural the figure at going see out I yet definitely customers And consummated been improving also haven't look

largest of the customers, XG phone yet. put out One hasn't great customer, a

through. think that's thing another So to

We're delivered horizon. the a there and is and excited really beat raise plenty on about just it. think QX. We I QX So

think really front opportunities We We're about with We're broad us. a enthused going of markets talked are front capital right of about the we're little that Kris. XG and are accelerate. The to I adding in business us. fully. opportunities that there bit the is executing in

Operator

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

is line open. Your

Chris Caso

as I'm if from you're I QX. seasonal the characterize the a if what new assuming could through large the is you. introductions you of that, the clarification to that that through in Is be Chinese gains kind are some better phones? kind your Yes, is guess, of going year, content guess be loaded, new pace something clarify driving seeing and that. of that. Chinese to you of the question that strength the that's go get first where strength can is front-end steady the it on phones from the going that And I thank maybe part is XG we then coming year, more

Liam Griffin

is This we're first the devices Sure. that talking bring about of Well, table. period and actually in Sure, the XG Chris. in things. revenue to couple a

seeing seeing also already the lot QX. it's we're And XG. in we're to Xiaomi some a were and Vivo, innings in part names But numbers with is look QX of China, at our early early that that. And that, like if Oppo, ramps early, for that's So improvements I of and Samsung. coming the

is some a XX one And mobile, and the of doing I've out. know do been larger talked I we've ramps great this customers, think things complex haven't going the We a about how it's call the to see well. be real that the company we with really put years. again opportunity for and for XG this Skyworks nice there's that very that are to we phone complexity knows on

about to stuff transition that to calling XG, win to allowing bear all us harder. coming troubleshoot to be the to XG to is and and now resources, people, XG the our much talked And customers know-how, the good it's is successful. allowing the really So right ability facilities, upon our business XG from that. our

is lot on So that a there going end.

broad to acquisition. business, you is bit, and of class, the high bounce players, doing want one numbers customers We tell little but that we're around we customers, a the look market it. And add high-end add then I customer that at to margin-rich we the can want metrics

I Some of cool that like with the the phone. getting BMW the and Skyworks Bosch, industrial other like for stuff we companies core to talked outside that that's about, mobile into and and markets resources what's on can and working those Raytheon, mean of names technologies automotive, still still and into really Nissan. plays important connectivity. really names is And lever those connectivity port it's we

Chris Caso

That's you. helpful. Thank

ramp proceeds, you steady. of XG follow-up what as And the scenarios capex been at in to you substantial meet maybe fairly up but are to year? decisions? put where really to capacity affect a little your order you and as some capex those your need make through As just that go time the has to bit, more need planning, what you I does in how there point a do said, that guess in

Kris Sennesael

those continuous basis. decisions on making we're No, a

in it's we December again, continue of And additional million to the quarter, an a at put $XXX look so Just combination. capex will every and quarter. do we so

big gallium pure as can complex a our type different the capacity well that part expanding arsenide we more amplifiers. packaging our of technology as so power and of volumes. higher reach is and of also right, that Some related, expanding But capacity and related, the handle technologies with in is filter testing,

on So XX% or capex, cash will of about -- to a again count and despite drive we XX%-plus margin. free continue that,

Operator

next Ackerman question from And comes line of from the your Cowen. Karl

Your open. is line

Karl Ackerman

I two may -- may. I if you. I Thank two have if have I

the go classify there's question all, you across would we we outlook, time the follow-up. inventory to I March fairly how First channel on given all inventory. a March quarter in But and top your if just And tight of of a how back or seems would are the flagships April to frame? a be kind six have suppliers It smartphone launching classify window.

Kris Sennesael

But keep of the healthy, is bit we Yes very -- component of chain far the with in the up little buildup little no, the is supply right, level. a There seems launches channel be inventory is phones. that bit see to at definitely least in to anticipation a Chinese those XG as have what the a struggling new New Year. visibility, as we on actually of

in healthy. inventory is channel the so pretty the And

Karl Ackerman

Got it, helpful. that's

I Should creates in concerned been color has implementation private enabled there there satellite from the Any auctions the it decision at noise States. follow-up to in of phones halt be the helpful. overly my XG cellular United Do of be of we for FCC's here? Thank lot services worried guess would XG the offering you. about perhaps a on you As here and C-band that all? a delay think operators

Liam Griffin

is any don't Sure. I going us think in that it to way. Yes, affect

upside if us doesn't to have But -- opportunity have our a on the We'd roam then there question. any But devices the that's think assume our more our right a on. negative now but on base spectrum create the open probably may -- that up case spin is be and for over auctions it learn good more In to on negative [ph] time, they a fall X-X fact, from don't public and an end. it roam I to more opportunities end.

to well is pretty the I positioned going much XG and aligned we've the spectrum very Standards think Boards where be. and we're with

but So more is we're keep over develop on support spectrum eyes that over that, will absolutely that opportunity. that's will will able and to spectrum. transmission all If be communication there definitely we solutions our added, the

Operator

And of Harsh from from last Kumar the line Piper question comes our Jaffray.

Your line is open.

Harsh Kumar

also the XG as generation millimeter capable. Clearly of a wave questions guys in. be of will Liam, squeezing have I that Then well. first Skyworks in follow-up. process. was how a at you. for then you sub-X. the stand some Thanks me curious this for one for There's preparedness where in handsets I thought and your whether Two on And point. on they'll lot debate wave is US the millimeter had

Liam Griffin

it it Sure, It's there tremendous a of an Harsh. It some opportunities, are technology, and latency some it's has it's Theoretically wave, interesting Well, expensive. an current. benefits. time but same millimeter at interesting draws lot the technology drawbacks. has speed and

You of there. sight have line impediments

it's a objects, working of campuses challenge. kind is a We're a technology whether -- So going isn't dense unimpeded great any high-speed standard be offer. seeing that's that these some a we with for and are may it's something today. it be really all or a possible. college short to customers some connection It going into stadium in there where over distance high-density need areas, by you But high

over right also our that right cost-effective looking Now now. it technology of and customers of lot evolve and a at may it could little just be the way not aperture. it to bit evolve now A But time it's for make are a out performance-effective. and the

fab. about, bets some small do have incremental our on we are. we've have own wave. talked millimeter Some as And We

next cues. technologies them. that going for help talk element at can it's to some But starts be information point, we our to, year. significant think And in our technology But the need I the we share to So blossom. to if that's we get that this we to a XG, we at least customers [indiscernible] run of where don't and about

Harsh Kumar

over are stuff, be and lot in question believe I have than helpful. things cellular with you give pure with upgrades we skipped just the and very historical like call you to increase greater that XG? be and Wi-Fi RF asked And want that I I Liam. answered what that Bluetooth I the was content might the of Vivek or seeing? other even that us, at of might What ex in guys part. if happening think a that. Understood, XG but Thank take number put as line And you had you, side, think generous you or a upgrades on content Would beginning of will I you curious on a increases. kind then think

Liam Griffin

It's that the the it's be higher that upgrade, be -- definitely content, I'll than the to physical -- And XG to necessary XG to believe. incremental tell than absolute going XG more content are value it's an bigger and to went I the That's the XG. the XG than fact. is that not going specific again because devices value it's that from okay. incremental you, build to solution

to capitalize. Now, is the who positioned question best is

incredibly an reach. have broad We

the that have noted, with have We the capacity, but just engagements not we've we all Kris with customers, technologies technology. said, as unique

that. love we So

and to So in $X XG. on capture that how how on incremental we multi-dollar opportunity. that presentations, more from about market to be time. the your then you We the about a talked customer or do And all you how solution our there execute, think maybe is do going you to best meaningful bring $X provide is to

love that's that's and factors the strength stuff do; I of are the our Company. mean, the to those So we

Operator

question-and-answer Ladies and session. back Mr. Griffin gentlemen, closing I'll remarks. today's for concludes call the that now turn to any over

Liam Griffin

quarter. on Thank you conferences Thank to look at participating during for We you seeing all today's upcoming the forward you. investor call.

Operator

today's your gentlemen, for concludes you thank We and Ladies that call. conference does participation.

Skyworks Solutions (SWKS) 23 Jan 202020 Q1 Earnings call transcript