Skyworks Solutions (SWKS) 2 Nov 202020 Q4 Earnings call transcript

Company Profile

Participants

Mitchell Haws	VP, IR
Liam Griffin	CEO, President & Director
Kris Sennesael	SVP & CFO
Vivek Arya	Bank of America Merrill Lynch
Timothy Arcuri	UBS Investment Bank
Toshiya Hari	Goldman Sachs Group
Blayne Curtis	Barclays Bank
Karl Ackerman	Cowen and Company
Edward Snyder	Charter Equity Research
Ambrish Srivastava	BMO Capital Markets
Christopher Caso	Raymond James & Associates
Craig Ellis	B. Riley Securities

Call transcript

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Operator

Good afternoon, and welcome to Skyworks Solutions Fourth Quarter and 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.

Mitchell Haws

Rob. you, Thank and Year everyone, Skyworks' Fiscal Fourth Good XXXX welcome Conference and End Call. Quarter afternoon, to With me Officer. today Executive are Liam Griffin, our Kris our Officer; President Sennesael, Chief Financial and and Chief

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

Additionally, section reconciliation to financial press website to the the include complete our discuss with of for Liam. guidance within a that, With Please certain call will the Investor refer to our measures, release results company Relations non-GAAP our turn I'll and we GAAP. consistent prior practice.

Liam Griffin

the Skyworks Thanks, quarter Mitch, guidance. everyone. and welcome, our with and results delivered fourth well of revenue fiscal earnings ahead in exceptional

spanned infrastructure. across and mobile, automotive, base; IoT, our customer entire audio momentum cognitive the Importantly,

In and fact compared double-digit our revenues QX markets to generated last of year. growth grew XX% and portfolios broad each in sequentially mobile

both markets generated $X.XX, detail. generation We margin in of more XX%. we looking the in technology high of by per are key around in the of deploy. have launched and years just leading XG with world's Recent operating of revenue XX% regions rollout guidance guidance. new margin of smartphones XX.X% benefiting in this lineup the XXXX. on strong adoption cash now points we share more quarter released networks XXXX, Now Capitalizing $XXX the And its thesis. catalyst investment highlight flow, world. products, and just We of our countries XG-enabled of entire exceeding $X.XX, $XXX is now We already the quarter. $XXX by with our Notably, XX at and operating totaling smartphone earnings growth million our world's already million, are driving next million of devices, delivered manufacturer more than projections end set the accelerating. XX% above underpinning from achieved gross posted to the XG how rapidly of a over has of XG data in

Although we and ushering in early expansive arrived, XG of only are opportunities. in the a has new set innings,

cases. commerce. to automotive, the innovative During our broad From solutions most IoT, quarter, set use newest industrial powered touchless and audio smartphones and a of the cognitive

of Xs. supporting Xiaomi, mobile, accelerated other points IoT, and launches, our ramp while and major Specifically, Samsung, smartphone systems and SkyX In launched point-of-sale leading Square, Verizon from WiFi Amazon, in portfolio, and advanced the ramped Italia. we Telecom Vivo, routers we XG those Tier including Google WiFi for ASUS, X for solutions at at X at touchless powered NETGEAR gateways residential enabled Oppo, access

in Razor Facebook's also supported VR among at and platform. position Oculus powering solutions, Sony, others. We headsets wireless we bolstered latency low our cognitive further Logitech, And audio newest

unique enabling global Fibocom's development wins portfolio, momentum year, Strategic and of car by Korea. rapidly for deliver changing Census. workforce, and system over cell and flow With automotive, is and engine investments Japan modules array nodes Daimler enterprise Boston and BMW talented leading expansive most high-speed the ability turn positioned OEMs efficient And on small metering scale, delivered and above-market In wireless performance, the on scale I technology Now QX. for importantly, capitalize our broad customer and XX to leading at customer finally, landscape base our at seasoned QX engagements illustrate medical an moving critical installations. latest a a for market that integration, This technology deep multiple in secured subsystems transitions. our experience well and solutions with connected outlook funds Tesla and of utility of Fundamentally, and Skyworks applications, of we our execute supported finally, growth. nature a solutions, launched for cash the and ramp customers multiple GE will supporting connectivity telematic These diverse to value. that, infrastructure, in by the applications. and next-generation and in We and introduced architectures. space. Kris to we differentiated to IoT is demand industrial for with also solutions. embedded successive fuels relationships across call underpinned continuous stations years, design fiscal and over discussion MIMO Itron the increasing We established Scientific in along

Kris Sennesael

Thanks, million, guidance our driven coming mobile into the Skyworks solutions and by is of fourth revenue was market fiscal adoption Liam. and than was quarter of for year-over-year, the increasing XX% rising up momentum. up this XXXX XX% the sequentially broad higher million $XXX midpoint of $XXX Revenue QX.

our other net grew million in diluted of beating to sequentially future the Operating per gross sequentially. In an and basis in revenue million. demonstrating digits million line broad model XX% support rate year. drove of in $XXX in XX.X% markets revenue, our expenses, by XX% broad to of or tax incurred strategic customer reach. of guidance $X.XX. We execution increased Gross up a $XXX were on momentum margin and margin our was operating and greatly were QX income, share continuing operating margins record fourth compared $XXX fact, of We points double leverage expanding grew million of while while XX% of million profit XX resulting growth. quarter both last XX.X%, expenses operating EPS earnings of last a and established mobile X.X%, our million markets of $XXX revenue, compared XX%. and Top $X.XX, $XXX sequentially the into new year. of in up income translating QX driving generated quarterly effective We investments was $X of

the Turning $XXX $XX paid cash to and Fourth million cash capital And $XXX flow in flow. dividends. from balance We conviction of was fiscal quarter X.X price $XXX million. for average operations of strength approximately of an million sheet common given per shares a repurchased of at total stock expenditures underlying our million. share million our and we the $XXX business, in were our

the year. the buybacks Skyworks for and in this bottom share $X with fiscal of Navigating and As COVID-XX $X.X note on line from strong and annual billion, $X.X from the $X a million growth cash year we $X.X gross we trade fiscal summary, shareholders $X.XX ended $X into enter a top profitability our million and challenging have was billion fiscal of team and fiscal the quarter well We $X.X translating headwinds X.X position we billion, generation fourth payments pandemic ended gross income despite diluted executed as the U.S.-China margin share. an was high with investments operations earnings of of let's no we returned nearly billion to billion, new and throughout the is fiscal company And XX.X%. million the exceptionally generated environment. shares we future also XXXX review repurchased Operating resulting dividend XXXX, income margin of of the operating In revenue results. debt. a profit Net relations. was XX.X%. and delivered cash with as in year of per in era. billion XG billion, $XXX Cash We of flow and $XXX with

XXXX. Now on of let's QX fiscal move for to our outlook

earnings revenue deliver share We and of per quarter another sequential our in expect double-digit to quarter. first fiscal growth

is At midpoint as is to and of in we Specifically, $X.XX the margin of increase to expected the and continue the anticipate year-over-year. billion. be range Revenue XX% XX.XX% revenue between for XX% Gross billion. $X.XXX profitability $X.XX to expansion. billion sequentially drive XX.XX% we to projected quarter

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

our call and an count intend more earnings on of revenue shares. that, million be deliver range, $X.XX, expect a the Liam. share the back year-over-year over I'll XX% XXX.X diluted to at basis. of We And turn increase we midpoint of to share than per to with diluted XX% sequentially the Accordingly, approximately

Liam Griffin

September capping and our demonstrated business. resilience year a significantly off of fiscal agility that and Kris. revenue Thanks, the share, exceeded in expectations per Skyworks and earnings tested quarter

innovative revolutionizes XG safe for connectivity growth. in solutions across end playing positioning As our momentum an rapidly today's and driving portfolio connections, while SkyX proliferates ultra-fast a continued markets. expanding business and launches, set of ramping essential in we ubiquitous, across challenging global technologies reliable, are platform are our environment, enabling our role Skyworks Clearly,

the open our our platform stockholders. our a balance for cash prepared and consistent Finally, sheet line returns deliver technology to provide premium generation concludes That to Operator, formidable remarks. questions. investment let's as we strong

Operator

[Operator Instructions].

Bank comes of Your Vivek line first Arya question from from America. the of

Vivek Arya

strong much grow rate December XG grow much quarter contributing the runway the to the and cycle QX Is results of Liam, how did my there off Just kind outlook. you are at here? business do to accelerating outlook. can we from seeing think And we the is look run your here? and this these when levels? Where from it first strength annualize quarterly Congratulations December? of XG in Does is XG -- how the we you're that in sales is December? on on question

Liam Griffin

a of me let ramp saw the great APAC bit QX start in actually that question. Well, larger part we of Yes, Sure. saying, our with by customers. and XG a

so And great. far, been it's going

early and been But very, have has very The demand expediting incredible, about in We really so business. winning been been cycle. the it's products. that. also thrilled We've we're

of momentum QX. rapidly towards So accelerated the the our end brought which QX quarter period, and into

by was QX region. Our APAC period the led typically

very our well move by cases, balanced it's X we both we're and in Tier customers. into well led As fiscal And positioned. QX,

into QX to into early of markets, in we strength good in plays XG overall again, And very, from the very addition in here QX. great a and that, In that's out set -- IoT so moving landscape. broad with really round and

Vivek Arya

conceptually, follow-up, sustain Just about into my of -- Liam, how strength XXXX, QX? any And around large And calendar start also your you be see the think this QX? color delayed you do we if that into Should have visibility have we expect should what go very given could calendar into how for as helpful. would to Right. seasonality at customers, we QX? the one

Liam Griffin

was the these midpoint. million go $XXX QX which and demand QX, right. the are above is XX% QX We the Sure. certainly players know at customer flagship into Well, off And there. guiding very just million that that consensus we are feel -- as we sure about leading across $XXX that with of to quickly It's the to customer, get comfortable charge. a diversified working couple that. products bases. we we But and There's get Sure. see, sequentially, to now our we're you make our coming delivery, guidance

So good very we look more forward. we as to outlook and about delivering go feel our forward

Operator

next question Timothy from the UBS. Your comes of line Arcuri from

Timothy Arcuri

for also wondering, can markets? what's broad for if guidance then Kris, a follow-up. give you an have us of the I'm December And assumed I idea

Kris Sennesael

Yes.

So was quarters, right? revenue for in a a we definitely broad the total pleased talk markets. little it quarter, $XXX of markets. about maybe bit we're September new XX% just to just very shy see in is million was broad what our all-time with And record revenue first It approximately of of which

As was indicated the sequentially, that million into well, as is Liam $XX just almost revenue which XX% September we of quarter. up saw incremental it

revenue year-over-year are sequential so growth QX our In December to of broad double-digit growth fiscal markets. so quarter, September we the back in in 'XX, expect we the quarter. further And

will we with in a the all-time up quarter. So December high new end

that supporting double-digit growth everything course, place. across the from our year-over-year really board. solutions, very, demand broad connectivity strong home, from part from strength for it's we very And from learn some broad home, or driven commerce from markets. home, markets, for so home, the work translates of right, by In play is wireless see from And home, strong any in into that

supporting business. also really momentum And in automotive cognitive rebound not saw IoT and XG last our build-out positive We the well in our as audio least, then And with we business, good a business. networks. infrastructure of our great nice the but also in industrial really have

together, And put September our when broad business markets guiding and it really so an all all-time records all-time to doing well, December. record you in is in

Timothy Arcuri

the above second not look drop-through the overall the in And if And not points away my margin. margin too gross guess like little very it's margins I revenue September. guidance, are. And on dropping through still gross from in but levels model, I There's is incremental the below XXX the year-over-year really what basis at is then on we're much you're then December assumed that's far margin. question financial

bit little mix? it a what's can on just So talk about you simply going there? Is

Kris Sennesael

Yes.

September basis gross I'm the at all, sequentially. of the up First pleased XX.X%, in points XX quarter with margin

continue been margin that. And steady we Quarter-over-quarter, at hinting so we will gross make progress have further improvement. at to

to XX.XX%. so And guiding we XX.XX% are

December and some supply mind a chain sequentially result headwinds the still some So of as is extra distancing, that again, social up and into sanitation with quarter. us. COVID-XX in disruption we that hitting Keep here in the cleaning have

the there model XX%. And so we to target of time see gross expect on our towards further over improvements margin

Operator

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

Toshiya Hari

follow-up. Congratulations pulling on would there? And thoughts might customer at well both a strong a that assess I've big results. the then bit. be Liam, as characterize base? your there's customers or today, got Obviously, quick you some how Any your concern as little of Skyworks at in a inventory

Liam Griffin

that off lot parts late working our we to we customers orders, Honestly, Yes. of were get scrambling had to these deliver. a We on out. were tails

low. inventories very we our So -- are

Our into supply a a been created breakneck biggest chain. There COVID pace so deliver cycle, bumps bit have had own some some, in in issues little back. factories difficulty this to that of been were challenges. think, down. the with are further We the our It great those operationally has DSOs I

home towards I we positioned we And But then that XX% position XG leaders unique The in-house QX it's we're is tremendous great of crafted now a sticky. Kris the side, Peloton move real. very great phone. now, amount total It's just but the into then right been think not coming But Zoom [ph] customized, of the again, and the out portfolio moving -- with browsing very It's well line. or demand. And that a had And and is for is some in-house things be that that the on gains work it's video of this us. estate portfolio or at your really whether real customer, aggressive [bias] the up to stay connectivity compelling continue bring going highly to on us. that the content with and China with lot mentioned. QX, handset crafted catalyst, into top largest market, to in may solutions technology-rich also our it with to do, customer. to are

long clear and invested for quite So about we our for doing it's a been right for this -- time. and about long articulate We've now. We've been in waited talking our very this a were for win, XG ability ability, a we We're and while, we're time. winning. a to that's what

Toshiya Hari

tightness. given it you wafer Anything outsourced I bit customer the margins. a mix Kris, the offsetting of was then, super hearing wanted Is revenue. product in And mix? little to of versus model. We're sort increase a in-sourced And there would the could elaborate little helpful. ton be headwinds on hoping not COVID? you it. just be it bit double-click up of leverage add seeing the going here Is in Got that's we're pricing just Is Again, that gross a between it I sort on you're might product? seeing can

Kris Sennesael

it's No, Yes. pricing there. Right. don't a as We point view, anything see from business of usual. special

have the of so margins, We a do the improve it's high as It's part continue way our to And a we there. becoming gross again, is to added-value threefold. larger XG products portfolio. bring market, our especially new tailwind

operational in chain that, a factories out, efficiencies. COVID-XX well due benefit hopefully, addition But continue and today our the that we as pandemic. from down will There mix of as always In and couple inefficiencies It's course, then in some not the the and to to pointed to supply And we changes. are mix as away is the quarters as drive I yes, there of some there. quickly. And logistics. see But well. in road, going unfortunately, that's own

As into little segment. bit grow higher mobile a our a broad segment mobile compared faster quarter. has you definitely, gross to know, to market And December margin going is the the

So make all improving progress continue again, gross to will when further you at good we that put margins. together,

Operator

from from next Your Blayne Barclays. Curtis comes the question of line

Blayne Curtis

results. results. on Perhaps the the on Congrats

just to answer a to back sure heard prior question. wanted to go make the Just correctly. I I want

into the Historically, some for up. of on China, to to may whether December you quarter, Android into that's with a obviously, what content, saying were As lot just up. be it comments on you quarter been Android a be look expect XG down world. you but I wanted just and understand the December

Kris Sennesael

growth board, accounts, across all increase the all we accounts. in mobile at at No, see in markets right,

be be will of yes, the X China course, Vivo, sequentially. sequentially. key that's So customers, sequentially. and There's will course, The will up Xiaomi Huawei. exception, up customer large of be Samsung Oppo, up

know, longer past September new export the allowed you XX. to no on based are restrictions, As we ship

of on of the result Huawei in a revenue. our that, expectations slightly at revenue QX below or was about actually X% As

include still And the Despite recently, certain products fact they guide, out need, so the customer, did get December figuring Huawei. it to are we ship in not to products Huawei. But limited they any that we the with license we want. a which products did more revenue which for

so did not include we that quarter. guide the into And our December for

Liam Griffin

I one wanted add to to more sorry, I'm that. just

off Tier more Android when X at December you of I quarter really a cycle, that larger where is think I that kicked in the think QX, look play.

with Lot That embedded of of will a by led you being position the us, good XG, roll. then in great launch well. top very the quarter to more And in So continue which bit December play have lot of there, Android, solutions sooner a players. MediaTek stay will little as the a.

Blayne Curtis

maybe a quarter. September on follow-up then the just And

I most September beat. was in haven't was of by the upside so you amount, you surprising to curious beaten pointed always just as the quarter? nice You a what it a huge

Liam Griffin

also The had not markets. really an with broad set set we're XG a sticky of market but incredible record diversification record, in excited a and just really opportunities broad it and new many, -- many steep really Yes, quarterly only did incredible acceleration about in some that. it business, for customers

We we that of months shoot the future. revenue over have will into set us have couple that whole opportunities of to consummated green last the a drive continue for

was benefit. that great a So

things it's X opportunity pandemic about. certainly been that's that hard area benefited. been, as of there's with as That's come Some those the some

Operator

next from Your Karl Ackerman comes & the line Company. of question from Cowen

Karl Ackerman

been restrictions. seems to there be be tomorrow, Liam, were trade impacted if has growing U.S. handicap. smartphone know I investor go Huawei Huawei components to the clearly, But to it's how may China to election with interest from suppliers. back may handsets, a you from U.S. difficult in procure positioned I if

the So for versus do the the supply inventory you balance how I making sure remains you have order balanced? guess, enthusiasm book across chain

Liam Griffin

going Sure. Kris business of as right very, any to piece all, there is upside very small. small expect very, now, a be Well, Huawei, very we first forward. of our don't And indicated, just

as few a mentioned, potentially license opening did from they #X However, ago. years opportunities. door We a we for Chris a And great a there's with commerce, position customers. were more Huawei, get and our had

we they And them. the were more that were a of integration provided player, and that with provided. technologies that company So appreciated work we how we know to the high-end a

that door we're we're the separated meantime, to But in forward, working with if our back we're also in unfortunately, us nothing lost. China trade able peers. mentioned others. we the all the and separated we're some moving ecosystem right the Android that at other So of players again, issues and and deliver, opens There's it. up But

balanced design to on been like catch able feel to know hedged other how business a we we're to So opportunity, on lot that the But We that. great. we we've know If that's it has there's like redistributed, and been to We how in. an sell of and end. very feel that. well

too vigilant not it, So emerge. stay about but we're if we'll concerned opportunities certainly

Karl Ackerman

could single I XXXX overall quarter, your Understood. not appears units will may, Kris, when in practice usually decline for should my follow-up, know grow your it comment digits should if a next smartphone calendar from next your that beyond mobile a this digits. phones Is I high it's be business to year. year? but double as why perhaps there fundamental million increase not With XXX reason to XG significant year XXX roughly expectations perhaps content million

Kris Sennesael

strong plays units going to mean, XG. we we of not But definitely all how what that the on out. I'm No. units. really will -- I see adoption comment see the

existing has we integrated as adding that that's, have been On flip that the strong bands, again, do adding our technology filter more integrate many and lot very been years. XG new over opportunity with phones, business, more top a where couple introduced And being content which and being complexity. more that next and it's We've solutions. of of will in lot into indicating. XG are layered happen complexity. the XG, for Skyworks yes, as XG, side, we into gain really of years the Liam adds that's a a capability. on investing increase our We It's content our And PAs, what XG all adoption our the big for of see

Operator

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

Edward Snyder

of your very the ball on was clear for knocked the Mark Teron it largest park of this. out flow, and you've really customers Liam,

in You mobile's know Last modules only dominate. out many bands amplifiers Mobile's China, I is, I'd XG of have period given be industry which traditionally you big broadcast cetera. MIMO D.C., several greater like than we the of this get current bands consider your the probably current you DRX content content most and and in And into what et more China period for is be unit like going you're help XG going see the we first because to I Asia my that scratching you And the XG in in this coming it two? out the phones more year have would sounds given you're using year. more what power content phones glut to And capturing to in the the just where in requirements of a growth next about of going received of you the opinion or from to everybody's requirements year, think inclusion of phones, increase could volume functionality would pulling of pulled to I'm we're favor. in some and follow-up, with My in expected, flagship work what us maybe I expect the year. the a XX next increases see and view experiencing out this can in X. there point into sure a content had both got version. year. kind next question We're China please. in then or I'm lot head, But game section, what

Liam Griffin

where better, see really together. is oftentimes, how gain our can continue problems it we are, make with world a is going now content from do And the And the make the right Sure. the is hood, best inventing there's just our and good that's different we've we as customers the under And customers, to have today. A to we it the that solution and that. a been figure as SkyX very we what to one try that of the we much we parts than That's with be listen shoulder hood we're things all we and in all Well, content. we've We're that and out that results the look we under question. way how players. encouraged Tremendous that the there and engineers are our there, to in we're born. we the forth shoulder so out captured, the putting haven't of gained, more lot can new by solutions Skyworks that getting Ed. better, and opportunities much do to

think I technologies seeing now. we're So the that

XXXX we think different on today we in early innings XG, And all, and years X in going early call the be First everybody be there'll to all of of know, XG. knows XG this this and innings. XXXX X that a is or is

be there's work continuous So to a of work. done, lot

faster, more that turn. customers technology wheel want pushing us. want that want to continues constantly they wheel, current consumption. Our are data, lower they They And

much So we far. as do. so can to been happy what so There's with we're just as able that do we've more much

feel go the I getting and XG going comfortable XG, is same usage do and us, better. up think faster innings now way continue So early they adoption in you're did are lot that think to that read grow very cases XG. We can to the in on we the a We faster. going to from

I'm not about So too concerned it.

us, I our in customers. for think, the right our key Those elements bar about it's point. then us raising markets. the technology at investing are executing with and this about for It's

Edward Snyder

with Which has area the you. second antenna kind is And pulled I from is being in because we in pulled a module. that of a which content this XX a into control largest from know, stuff a your the switch lot messes That it stunning my customer know one that they antenna of Okay. I especially for this Skyworks, complexity, in phone. saw and antennas increase -- is the question you've just your did was huge of and before, things I from flown more lot that pull played and it wasn't but it went X system to on

there's predominantly much Is it. you doing the play view? in it ultra-wideband into of the if They're go phones, could cetera. you will doesn't this a of module this share at is et say gain I throwing into side so different Because So so sorry? would components? a that versus so of gross just opportunity core point getting ways look from what also margin, and to the the is not in more where module handset more point players of more a system a is turning that the of to going start at but play this in where RF this? kind content, phone they're many gross And just the much directions complicated to margin you starts for integrating guys really given because so out, many this

Liam Griffin

Yes, I completely with agree that comment.

things getting complex. we're now a getting into think very world I are where

very, have customers transmit account, tremendous a look DRX, their from end. can on job And our receive, band XX and very You it count complex. at

the the is our for know XG. do. TC-SAW, it's one the platform every in set we we're Skyworks want to better And is I think a it's And burden for and in at go integrated the it. one It's fabs, packaging, their much, of technologies configure point. having it's So satisfying to deliver we've paid getting of these bring things, suppliers, to for why an on more players like customer. solution that opportunity BAW, and the own it's Each unique try BGA reasons whether are there's solve unique. but capacity in It's difficult let's our a just needs to all whether that. this, in seeing us let's We go work what an much own whether been investor customers of those

So love again, We from to And innings, earn. to that early go lot a but of we here got upside there's plenty doing there's it. do. just

Operator

Your the next Srivastava BMO. from of comes Ambrish line question from

Ambrish Srivastava

to you Kris, seem popular especially today. be

I'm stick to going you as well. with So

my little XX.X% head was you time 'XX. bit If business in market have side. scratching $X margin. gross I the bit The a quarter September broad had Just gross on a last smaller. a billion rev, a margin back you I that's the right, little look had at the If

and So headwinds then -- sorry, the you talked tailwinds. and the -- positive about and the

as so business are you're then COVID-XX cost better, for to working headwind, the as positive and should higher And remove. products, you that margin the be some market your that inefficiencies advanced incrementally gross on mentioned positives growing. other So broad is well

cross million $XXX next it the mark quarter. should Now

the gross to more that should XX% assume line related headwind couple that we gross margins get help broad kind of market that the get that's see to the facing? to with that bigger, XXX that a in then target? just we come historical? And about quarters, of So is And that, past margin bps, and margin is given getting COVID it once is cost is back to fair your should

Kris Sennesael

it Well, Ambrish. right think the about when you way,

before. about that talked I've So

the You come have will points the COVID-XX here. basis XXX range headwind is in to over XX but down time

And working it so we're quarter. every hard

see elements And conviction improve further from all that we to that. gross upside so margin. the time, give we you continue over that And there well list is definitely as then us the there that will other

Ambrish Srivastava

terms has in how on the fairly of Okay. again, seeing Could it's rate, question is really, where opportunities, my annual the growth us it's for broad you revenue looking billion Liam, and from years business X the run X, follow-up markets maybe business. is And you. more ago? large how help you're then quick just changed understand a business. a up plus it And $X.X

Liam Griffin

names years infrastructure. Amazon, lot really like pretty there's early X We've look of of a our was diversified. of course, and today, Ring, narrow. or NETGEAR, larger markets, was customers, low-end It in a connections X one WiFi is Sonos, like players lot some of you it Google. GPS, work mainly Yes. it if the broad portfolio ago, got at And

really Facebook, have applications. cool We

We that well. had have quarter. like that with gaming, an audio great about Thinking good a business technologies margins as

with we with So and are it's -- Working defense. automotive these not even and coming like routers We've not. products X in actually oriented, of sound that some Again, that the bring more mentioned. partners in the technologies IoT WiFi consumer right we though grown access business Fibocom now. points

going work to we're look or seeing difficult this grow. it's continue applications anywhere. to you of seen I sticky home think that cases pandemic usage when those the work be We're from quite Some from at whether we've new through

is these move some And that, a So to of We going that's think that's more sustainable devices. and that see start to with up a we're area invariably, XG don't a that is move. wide We more we think think connections bump. quarterly that, sustainable. connecting

that the look the converts of handset well. the spreading going of into And of to beyond time, as over the see and WiFi connectivity some number much going well today, options car, extremely Bluetooth we're basically and a broad positioned markets consumer there. you applications, XG factory, if of But are the think you're at is adopting the So There are GPS. still some and XG. and I customers

take one can I about rates, application. by data unique customize things very, the We the Skyworks. connectivity can of think that's very and we from data rate, high low a it

that players bring So see up we're next again, happy design We'll broad as the in, but important more it's continues that's part. more look to more really in on at we and path, wins customer to markets And growth that. an extend. its and quarter reach report stepping definitely we

Operator

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

Christopher Caso

cash that to your what happening approach on changes guess, flow? question increasing, flow of cash, Any obviously, cash what's now. I and be the your in for that given would are plans is use first regarding

Kris Sennesael

return and our changes deliver no that as continue of program I we buyback back to to there. shareholder, as to program. No, our dividend free share all cash continue mean we very strong well combination the flow, of

optionality with And so us we've debt, still point from been the very cash continue and no is to view active from billion of of there leaves on a buyback point M&A of and an so view. active balance That be $X sheet there.

Christopher Caso

Got it.

what into could in of is seeing maybe as filling given procure seeing into Just of that components and assume bit of stepping customers? seeing Oppo, what year? with void if a strength and about Huawei as to some you little the you're you're and right at in is still you follow-up kind And a components, Xiaomi I unable continues you're Huawei that it to inability the Vivo, guess talk to those get M next go the China

Liam Griffin

we're Yes, Chris, that's some of seeing. what

everybody. So baseband with want we're to agnostic customers. We win to obviously, and

we major So Huawei had in -- Q&A and to cellphones, here is to us our and are go. We've the smaller need the while, just they've been we them. Samsung, market a the Xiaomis, And some come able in things back. able But we for for fortunately, the earlier do due technology. at lot certain well. even they That's for indicated to seeing Oppos, in a Huawei, we're global trade, step that to gotten still with while And as move long for of a fine. China the and We'll obviously customer. to as calibrate things a to redistribution great love technology design the does right and the to ready well. of We're market with it's that lot that a customer change a if work if changes Obviously, what that been to Vivos, great. that's to

no think I related. have everywhere. have want best But we trade XG to It's more real customer issue. problem that. certainly, can. no phone is very the There's serve We a we with to desire China the need And the and

Operator

Ellis of Riley final Your the FBR. B. line Craig from comes question from

Craig Ellis

strong guys. the on revenues, Congratulations

the fiscal I perform environment? so the and as quarter would how about second into you you can we how been late, in could this and normal And the has apologies characterize expect think then bit this business relative in strength seasonality hopped relative already would first the to on you if So a Chris, follow-up going is, to that asked. color But what on normal seasonality? little provide that quarter the Liam some should

Liam Griffin

Good Sure. Sure. question.

in on million lift As a sequential consensus. of in strong $XXX we the million earlier that half a and to resulted in off really years started back we've of been the had working said to acceleration that see investment had call, we beat and for design in gain, really wins QX $XXX

shipping very bit opportunity earlier, QX, So Xiaomi, launched. got adopted a lot APAC a see being ecosystem, of there. the and some with and of with to to Oppo, we in get Vivo, we've that. MediaTek also that momentum We've pie been that. to as little current to And quarter, well technologies entered some now player across right doing we well The market market with try catalysts incredible continue just up full great China that our with partnering leading that are the

our humming. So there factories are

executing. in our with customers. Our cases really inventories lean The right now. teams are many are overnight We're shipping

of we kind where that's it. So see

about March the just $XXX look feel quarter, But We if up too position. early million QX. at sequential. you at a XX% guide to it's look for a give bit we are, guided good on where you We we pretty when a the that. So little

This quarter think recognized, many where we've cases, people these And happen. so are of earlier, get In U.S., there's yet. technologies in this that some mentioned true. innings the can't the still also XG. first is are going I or it's We early but products and available. that's These to really want, the

move and lot So continue is the to year. and going is the complexity up, extremely low continue every going going more higher which there's adoption now, higher a to is to is to the rate, and to opportunity right And to move go, move up.

we performance we up So the And go XXXX. here in we there's now, like into have a really some move do put a good more lot we to lot but future. feel to as

Craig Ellis

Yes. That's Liam. And very to that innings. the question early the helpful, we're follow-up relates And that. I really in agree

broad than markets far $X I billion thought. is So faster at annualizing

existing and thing based markets broad contribution so relative new pace possible for I increase to that the programs you markets doing same of pull for units, keep level integrated and likely customers team. on significantly expect markets good basis? end then XXXX. and observer So But most forecasts, it it years, Is programs the with over end either revenue with think industry XXXX same could in in smartphone for in on in new to XG the to towards additional or the mobile? of Or new swing couple a mix would next keep we Xx

Liam Griffin

look opportunity, at there's last opportunity. the so are WiFi if what market. actually had opportunity tremendous And And cellular going GPS balance. we question. you sequential good still a this XX% really great broad now, a to is some amount numbers, on the that's No, quarter us of is And that some each, -- bringing Yes. market into

a chain share a you've supply can So that two common think portfolios to. we drive I share can and that common often got distinct technology

So the in it's or cellular long the term, take whether can over leader application, in want a to we or gaming be it's the it's headset we any connectivity infrastructure a whether automotive. And application. defense or

XXXX. end markets able X the are or of quarter last look in for certainly to All forward we do us. our are a but been And what targets those we and do with pleased to really could great better, we've

Operator

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

Liam Griffin

care. the Take Thank you call. today's all on conferences upcoming during with We look forward for participating at quarter. talking you to

Operator

we gentlemen, participating. you Ladies and that conclude thank and today's call, conference for does

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