Skyworks Solutions (SWKS) 6 Feb 232023 Q1 Earnings call transcript

Company Profile

Participants

Mitch Haws	Investor Relations
Liam Griffin	Chairman, Chief Executive Officer & President
Kris Sennesael	Chief Financial Officer
Ambrish Srivastava	BMO Capital Markets
Blayne Curtis	Barclays
Gary Mobley	Wells Fargo
Toshiya Hari	Goldman Sachs
Matt Ramsay	Cowen and Company
Edward Snyder	Charter Equity Research
Chris Caso	Credit Suisse
Karl Ackerman	BNP Paribas
Brett Simpson	Arete Research
Harsh Kumar	Piper Sandler

Call transcript

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Operator

Good afternoon, and welcome to the Skyworks Solutions First Quarter Fiscal Year 2023 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

JP. you, Thank and conference everyone, Skyworks' fiscal first Good welcome XXXX call. quarter afternoon, to today our With President; Liam are me Griffin, Sennesael, Chief and Chairman, our Financial Officer. Kris and CEO

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

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

Liam Griffin

results Mitch, and exceeding everyone. solid strong Skyworks consensus delivered Thanks, fiscal welcome, and cash flow with estimates, performance. revenue profitability record quarter first

Looking in more margin $X.XX of gross we of drove operating per million QX XX.X% $XXX operating cash earnings quarterly delivered of a record We generated for and posted billion, of of $X.XXX margin and revenue share flow, XX%. detail. We at Skyworks.

the partnered We at gigahertz fixed with their to we our X base. broadening connectivity extended expanded to and access advanced the first points our across leveraged emerging portfolio launch industry's WiFi IoT, X In to WiFi TP-Link Cambium growing networking design AT&T solid system X first customer unveiled gateways, we support Networks. wireless our addition financial results, several technology In segments. win pipeline high-growth in with a portfolio

functionality And for high clock we and for speed deployments. the for Across integrated frequency massive modular meet ramp centers. We requirements generation we XG in and distribution switches infrastructure leading precision technology timing platforms delivered to and markets, Cisco industrial MIMO networks. data enterprise Power-over-Ethernet

automotive quarter consecutive for our radio of pipeline design charger sixth design win our onboard achieved we And OEM. with platforms EV top Japanese strengthening wins record automotive, European In supplier. revenue, securing a a at with digital content

rapid are electrification network that and highly expansion trends computing, in drive advances the vehicles demand solutions. of IoT edge of integrated the forward, and major for Moving complexity traffic, customized cloud and mobile our and

A towards few highlights vehicles over remarks. doubling continue The with years. make these Skyworks undergoing mobile the leveraging of customers, Market be autonomous and significant traffic EVs to XXXX. state-of-the-art by connections U.S. is underscore key estimates to we past bulk electrification PC two leveraging in XX% key these high-performance XX of over capture over packaging. proliferate to scale. positioned automotive Wireless project acoustic our IoT industry markets, XXXX. revolutionary growth projected shift partners gallium the arsenide market network to devices technologies, and installed a billion with human upon opportunities from are wave soft well with technologies by to and capital is Collaborating transformative filtering, up

landscape. growing capabilities rapidly role this to and leading skills a fast Skyworks position play in These evolving,

last that, now and will discussion I a for outlook our call Kris the QX. of quarter's With turn to over for performance

Kris Sennesael

total fiscal their inventory Thanks, exceeding down was work XXXX weakness revenue billion, consensus of customers the revenue Liam. as estimates. XX% $X.XXX quarter Android for was approximately Skyworks' Mobile in of levels. first with

and XX XE points XX.X%, with million, WiFi gross resulting up shift revenue strong a the infrastructure, to and XX from was was of markets Broad approximately industrial in margin X. basis $XXX Gross profit global and sequentially. contribution up basis year-over-year a automotive, XX% points of

of an was operating of operating We $XX XX%. $XXX translating per and rate share other net effective diluted $XXX into generated million or $X.XX. income of Operating and $XXX our million expense income We million of tax expenses revenue. were of XX.X% margin earnings of million XX.X% incurred driving

to the flow. cash Turning

expenditures $XX in dividends from Capital cash cash $XXX of fiscal flow flow $XXX paid million. of all-time million flow in XX%. operations resulting common First repurchased a million We $XX an million margin a quarter. million, was for of and of approximately record a total in free stock $XXX record X.X were million and our quarter free cash shares of the

to stock highlighting of returned and On its a confidence we and ability have Directors in their our new Board strong our announced continue has cash trailing buybacks. billion Also flow. dividends basis, approved XX-month free that repurchase billion $X.X program, shareholders we today, a business to generating through $X

for billion. Gross outlook the to anticipate to billion XX.X%. our is be projected We revenue XXXX. Now to range between move XX% $X.XXX let's of margin QX of fiscal $X.XXX on and in

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

range our $X.XXX of to diluted earnings XXX.X diluted deliver intend count of We of midpoint share the $X.XX. shares. per we expect billion, be Accordingly, approximately million share revenue to the at

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

Liam Griffin

cash record delivered Skyworks Kris. flow profitability demonstrating results, quarter Thanks, solid free generation. strong first and

operational expanding a Skyworks pipeline, win innovative continue Importantly, positioning and of design scale to set our outperform. to robust technology-centric fueling solutions are

Despite predictable to remains our with ability diverse balance while underpinning returning technically strong and opportunities cash future cash a a remarks. to a our prepared shareholders. and fund talented generation challenging sheet our customer most environment, in and That Skyworks concludes history, well solution workforce, our positioned the macro seasoned set

Mitch Haws

begin we the session? question-and-answer can Operator,

Operator

Markets. the Your Capital Ambrish line of Instructions] BMO comes first question from [Operator Srivastava from

Ambrish Srivastava

Qorvo a back comes That and overall and your excess appreciated. Always get year talked was finished about about whole inventory in goods if inventory to winding down months, remember two pretty just inventory. bit months. I on maybe I of Kris. before Liam remarks, little talked wanted has check. MediaTek component to X.X correctly, short But has prepared thoughts a

up we it sheet, So forward, a on excuse well channel? about own inventory quite was quick Kris? what's your How your -- in inventory inventory the should a take And your on going as as me, the bit. then follow-up balance think

Liam Griffin

Liam. This Sure. is Yes.

at products in in-house technology Of and operational-centric very and our products, and locations. share a own And a fabs lot done assembly Skyworks, our course, of are test company together. our of own the lion's we're our

So ears it good with we inventory our really be or eyes here our on partners. and balances even whether on sites have the

ensure customers. very, we that are our aligning right careful very are on natural want So be to we to our always revenue We step with with demand.

excess right that -- down. we're I markets think job. our we're and been now just incredible letting inventory, are that teams have there There done an -- some has today bleed

exposure our there And is small. extremely

exposure. a cases, those But Some volatile. little more of we in the China in bit are very markets little have

note we the our control our and there, communication that can customers well. lots out customers So great products, with ship our working I to with think it's as best important of

we back good the So something about feel everybody that. half for we'll think to year. through work positioned it's same on I and And of is well the the and continue really page, be

Kris Sennesael

to inventory as Ambrish, the inventory right balance And sheet, it's we that now. but an relates it very at comfortable Yes. the level our with somewhat definitely level, have of on I'm elevated

stocks. the We've supply You to challenges. now we some quarters definitely of more couple softness due been And make account starts that been now to out increasing some recently, the macroeconomic proactively. have buffer adjusting seen were support where into of we to of have been a take sure course, wanted of that doing And demand, chains we've have some customer all came a loadings and We wafer our challenged. for we we accordingly. factory period

little Having that, bit said it's a again, elevated.

on half So in based the and back, year design known second XXXX. you mind level business we factories, the calendar do loading of expect, -- have our to bounce in to but keep are that we wins especially

And design so with ramps to support will on many based to wins our we of those customers. continue level-load big known

and to half of bounce of back do in business year. Korea also We the in second China Android-based some expect the the

back of And so expect the come continue the will normalized to that year. will in of days level the I second adjustments. a half to more do calendar inventory we down make

Operator

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

Blayne Curtis

a I backdrop. tough obviously, it's two. had mobile And

these results. are think good pretty I

your you're Android I And then recovery you're customer us guidance, Android. the give mean, if Just could in you largest can for on I Android iOS does if versus but was about December. curious December any set if thoughts March? don't bottom the to how through in talk level how the willing know just or there? much thinking you for March

Kris Sennesael

Yes.

So XX% large that their approximately as was execution great it total relates of customer the large supporting to customer That ramp phone revenue new the with that revenue. lineup. demonstrates the team clearly large customer by of in

of some phone, high-performance great really many acoustic devices, bulk devices complex some wave content leveraging those filtering. our in have We that

China. in that we due really the somewhat about I in think really the well know, to customer. that, the did despite that, you December were And quarter fact with the constrained December here team supply well COVID-related in large some customer issues talked as they executed so But

Liam Griffin

And Yes. follow up. just to Blayne,

the as in channel. here starting We to some are with because actually we've Android inventory saddle get portfolio. on back you was And holding that there been back know, the

to have think of still is opportunity normalized more a these on got we been gains that a I stay to fact position. bleeding. is, incremental the there until us high And the but for there levels the very it's inventory given sidelines kind

not to move the the that everything drive got products be We've want but as about need to we careful forward. roll. It's we The just product. to ready business, are markets

for the have we but sure. -- So momentum design win

Blayne Curtis

business ask the would broad in had of markets. up record to And then you quarter I&A And that be wanted a in March I I guidance? part think Whether then you know you as on September.

of curious Just how trajectory-wise? is doing that business kind

Kris Sennesael

Yes.

some really in as of a WiFi of said, there's year-over-year which It in content Solutions softer in see some are slightly strength upgrade design peers revenue down segment, some industrial overall that automotive Skyworks things we in But So demand. markets, was well, basis to of good we the market revenue. as roughly of broad big X. little that headwinds, on the in for similar early we we as and bit said competitors step-up turned definitely and being due some seeing well XX% we XE, as as segments. in December, side, the saw into that infrastructure are a for to see a And is as on flip the wins was the our WiFi traction our macroeconomic parts a some

in to line down As normal somewhat slightly markets it with seasonality. quarter, the be we broad sequentially, relates expect do to March

Operator

line question comes of Mobley Wells from Gary the next from Fargo. Your

Gary Mobley

been the not you reports the iOS some the associated with the particular, the world, Android order have guess, Can highlighted guys. you X your sockets out customer, specific in somewhere I largest world? satellite for you, for in your well or teardown link, only have as to opportunity there content content speak with X but that There of

Liam Griffin

Yes.

Satcom, is with applications. we right? And meaningful think think I you're engaged to and that are relatives the all referring I if of

Gary Mobley

right. That's

Liam Griffin

Yes, sure. Absolutely.

technology, So to it's the opportunity we It's to the have and market, an more bring to it's scale early building the early units. make in that work. the still blocks an of but kind IP -- global definitely

And we're so we definitely are engaged, involved. -- we're

the these of have work. make technologies We to some

companies of the kind We would also great have some of groundwork to And Skyworks. a network partnerships the do a evolve. be -- like the it that company with opportunity that the for can have

We have many frequency world and radio in well. the the of space in as building the Satcom understand blocks. deeply We

So evolving to we we'll table more the and are today, markets at as evolve. definitely but come it's be the an opportunity, upside

Gary Mobley

Okay.

not about commitments I least reserve. have these for your fully there underutilization any external But sounds you maybe to charges purchase to intermediate ask you utilize and speak utilization without of associated term. my won't supply. sort follow-up, can like want those ability of the with taking supply, supply, to internal your It at if Just

Kris Sennesael

Yes, Gary.

time many that are we we the quarters before, right for can the do loadings now. factory depending we of taking indicated your the managing more you see. adjust all accordingly adjusting And where have needed. are, the out you the attractive to, the of more demand course, time, cost you And As this been on cost course, structure, earlier our proactively that, take

continue to work operational improvements same on. course, and yield at so of While efficiencies, the on time,

with as vendors on we sure that overcommitting with have, I place, as that dialogue, done making purchases the but the well. at enough capacity factories. in team our done not executed one Having that. open think well pretty internal hand, third-party our an And well. and on has same We've We've time,

Operator

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

Toshiya Hari

a could your a context, I you more markets bit hoping business. little color provide Liam, bit more around was little broad

landed forward? markets record and where from the end about size a talked automotive hoping in business you the comms broad about your and those But 'XX you calendar specifically, think you're individual thinking And end across I revenue across industrial as market those I key within in well. how revenue you strength buckets markets? was could standpoint

And on pretty from to peers signs in most of are on be bullish automotive But and forward, your moderation the commentary of I industrial. there the and continues positive. guess, pretty comms

So those markets to what hoping you're seeing I as was hear in well.

Liam Griffin

we returns. opportunity not the three, great of we're Sure. energy but of of And purview were Skyworks and put is and really there now. a into ago, substantial two, Well, products getting are lot size the they markets, that four and of those some markets years the those

electrification millions really of of year, that got dollars the We've at automotive that a starting. coupled and time own and has opportunity a SLAB is vehicles for the I&A design been where a we So wins partners. technology of business now with EV in really deal, and some hundreds with IP just the brought is leveraging Skyworks in internal incredible our the of developments

this for our us, So of markets incredible drive I broad an be the think piece to will market portfolio. is one that going

other the about us. The we the it's they're we we're but as just technologies like opportunity now handset our benefits can in to great is And solutions, our many drive generally starting is not that really sensor space user with thing could clicking heard IoT technologies because a for We what populate of we if leverage the think years GPS, same for that demonstrate handsets. a for other to solutions. WiFi, have IoT, example, types you've things

for don't know-how, that is differentiator. scale, but to uniquely think, be but I the to develop next for end have turning opportunities, over the of wheels that specific smartphones, getting quite that us ability we're engines So technology, four definitely to some that market quite a And solutions, Skyworks set core wireless the years. just five to large really on those there's opportunity a

Toshiya Hari

sequentially margin. the quick one a bit margins quarter, despite gross little Got December in for In it. then and as And follow-up, sequentially your both a came up year-over-year. year-over-year in-line. revenue both declining were Chris on They and

else And give for the curious that primarily I margins what guiding then I more guess, in basis roughly is or the of XXX or some were December? mean you're on? take. gross So positive offsets March quarter, down, revenue something going importantly, points,

Kris Sennesael

Yes.

all, up into gross team I the think, great despite are. I drive efficiencies of with in points factories terms loadings. make that to environment. And First of our able XX basis pleased XX.X% that of operational points sequentially we up there. adjustments how fact we where some margins in execution Again, December, the the challenging we to with who are basis the I'm kudos keep year-over-year, really, that's margins, the And think, macroeconomic did continue main XX driver factory they despite up there, the to again,

loadings. I'm one you it. on of make with you all When together, hard have low guiding to we're XX%. a it you into bit and other of not revenue, from margin we XXs. with March, I'm where factory the hand, to translate relates But it work wish right, was continue in happy comes now. a it happy going the As On adjustments I I'm the XX%, as and right are mix to get view to of hand, point a the at play some little that we the margins on indicated, headwinds, those into that put

Operator

line Your question next Ramsay from comes Matt Cowen. of from the

Matt Ramsay

more about earnings I'm sort the broad inventory conversation curious around of tons markets But in levels there's business. I of smartphone wanted space. Yes. inventory ask to the about mean through I cycle levels. been this maybe

are down couple little maybe a going having things a times bit. affecting and on macroeconomic be business, that You the it mentioned that guys of obvious

kind business How seeing broad just the the in inventory term? you're the markets through walk channel you through in situation the direct, goes business? just Maybe diverse of business is inventory what goes broad markets for what levels near how and

Liam Griffin

diverse, market is portfolio end Sure. Liam. in opportunity The lot the great extremely broad is it's many Sure. of And news here leading markets. diverse. towards very different is This a good

highly pretty supply So our in-house. our have And we operational of decent our side stuff play teams have on the are do sophisticated, we a We most chains. own there.

be. on and have certainly managing of we're inventory are business. to think a where I really good but some there, that's it pockets And the So going we There's should quite impede read inventories really well. they out progress the of nothing

I think $XX,XXX accounts the doing kind the of number And of we're really mix when $X million issue $XX,XXX there's and bringing the in the versus cool the may customers thing smartphone a you're is new have that some that space. you of accounts in.

margin understanding play. the like an So And But the is teams sales ability We everything there's different can about angles really the diversification, Skyworks distribution It's this and control. great chain of the direct, in are easy, benefits it's the starting operator. a think to supply market little business. our not a also management, the do there versus where in-house. see of that work to do we're outstanding. just but know, And includes online, we plays being I way profiles you there bit And a lot that diversification. broad we

We've segments few is new automotive. really major tough. like about talked Automotive a

get certification. You've got to

of execute many built the You applicable years, our And the but so challenging we've all lot kind got knowledge we've in is there. of that those the tough cases really other prove There's and there in work. over We've your to a done environments. muscles efforts to -- markets. mobile ability in flexed for the some that

share matter. customers and lion's few accounts And really of forward companies and is The look growing. So of our tier that going customer well. playing a set but diversification to be couple are a bumps the to we is the it. top There's wrinkles, always

more forward go to forward. looking we we're as So

Matt Ramsay

up just on topic. appreciate to Really follow that it. Kris,

business about the that can about do of we fiscal way in mobile of in the work smartphone. about inventory year half how in think our back just the as just potentially you Is year, inventory on kind we said all the think the should or calendar how business Liam made, a grow of and back? that But through back just based in year the snapping for broad shape I the that comments still again had modeling seasonally the we're that your You the as shape script comes of in correction the think that it markets? and business

Kris Sennesael

can this we said, really some year. key have we that, repeat just we our -- we it's to on what you markets annual $X markets broad macroeconomic an do we business. about win on, Liam inventory grow and billion a of do or No, And business despite all know, and markets a grow on headwinds strong some based -- going And maybe business, markets broad design Yes. challenges going our of and We business technologies. not softer I'm demand play broad $X basis. as but little that is momentum. we that correction in of with our those believe billion high-growth on And some bit believe somewhat can

Operator

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

Edward Snyder

were be the phone cetera. growth, going because in slowing content year prospects say, this is all. custom revenue Samsung don't quarter? falling that the because like Samsung More at in flagship But when broach much really but because than below knife I very were bigger Samsung that What don't let's real way for them, converting modules kind they all, of this know you've first your plan their over in again I they et you know ASPs Samsung at to in very of importantly, a well design. XX% you to this you're and side both the true for there a is for, play everything missed year. China, doing specifically to demand question quick customers growth is masters, and participate a doing Sounds master, you did flip about largest they the master. are are where your at well do and

calendar moving down be of last So in you year seriously and could what I'm flagship parts luckily had you or master, of what much break given would better I and you prospects, about that the please. each then helpful. profile all all at And year the occur you two. that 'XX you those maybe trying this a at that get playing the Samsung then fact between weren't And think follow-up, if different year, a there could to think

Kris Sennesael

Yes, just add.

So was customer. than Samsung less a XX%

period reduced right I think provide quarter. going over the have documented. proactively, And on through to December that some I'll now. in customer, it to hand very burn-off it's And again, shipments Liam They are well to an our we especially more color Samsung. inventory

Liam Griffin

look, as it's here they other player Yes. the did I in the -- major some a industry, I and is think banged Samsung a bit up Android mean players. cycle got in

been the we've And good working actually we've content some like through So pretty phones. got Ed. is in irony that, those

look we get inventory of the terms I semiconductor speak. for is going the sort our that to so even the is industry forward business to and up And so their trying that just and some mean, cleared beyond, in to be ways and get right of the think through through to feet, to on back we'll there. the technology and volatility I But industry

supply focused on own our and inventory chain. own And our we're very

We never So want the part Android deliver want. we as want on cold. to didn't We inventory great, were the be channel. in a any great Samsung a what bit hot and back is too it that. able building of want We the customer. have stepped ears. eyes We or customers to too levels

side. bumps, some we even everything with going side, we're to work help do to ensure fulfillment can can we on on not only but them the having the and technology Just that

and honestly, of for markets temporary really technology with the very continue dynamic technologies and Korea company cell are a significant are asset going a to to we person They're Samsung and as there. a lot is critical that's phones viewed well. do that think blip, I very vital I think in So a make in a

to revenue to flow start over second more accretive going the and half. that's in think we'll see we So

Edward Snyder

Actually, was BAW to if of in particularly some well BAW. at could, win see head to you've actually with you I And surprising and your done go guys head rather that. it the leading

So down. around satellite. content took We your you the I'm satellite my the of got We year, get don't growth. We trying to half second arms say, saw tear part.

many your you filters transmit illustrated Tx, DRx think in I twice your got module last as that BAW as year. we

I in more areas of up make side And it in and didn't we've pretty new it some about with it -- sounds to they know you're we're from had because second fact from a this -- what should content. is picked they're obviously that you be new be going is satellite? call capabilities as did to of class the going half for the content, classes some BAW optimistic of like like especially Or the Is Qorvo to no hearing we be also looking the going before business that with antenna-plexers. gain sequel, spread parts existing

you think arms my of around going competitive the trying fit be in done and what couple that in guys get given years? is market you've in where last the to just to you'll how BAW I'm So with

Liam Griffin

business mean great. know Yes. I you technology. that's That's No, the know great. you the and

be more wasn't the felt ready over to do and were broad for now So we this that becoming you're to and opportunity see, of starting nice one, appetite more customers. set high-speed But to now thing going nodes can incredible the for market us appetite efficient customer really at of get and or more these the to The there, I a data a of needs wasn't which right? players like And as some it's with I delivering course, just going we're jumping but level. the appetite, an of here technologies we're all to in consumer what technology. small be the -- think go, you're see more to is done starting get

the problems. the so we phone standard needs customers globally, We complex, what love mean and changed the that. much and ability to run see. consumption, current more becoming want more it's to cell that exactly want today, I it's the we the solve requirements, to That's a tough from

from one all the to easy, you're and simple that it's And hard into to know one to do, module, You not way teams operational in simple, technology our this our stuff bringing really our apparently disparate love team, sales. of side, here is When all It's right? do. at right? Skyworks technologies the technologists, the things these

that And are that We the great love emerge so cases we that and us. more complexity use opportunity. for love

Kris Sennesael

And believe just devices story, to and and BAW number continue is inside illustrate point, close success the that definitely that ride. to rate go billion from really our getting so $X major a run revenue a it's filters to that annualized will have to up we

Operator

Credit Your from comes the line from of next question Chris Caso Suisse.

Chris Caso

low June? in that in the to the the would point be translates have revenue? -- year. point for in bottoming true December. What either if that out and for that business be in the A did that how for out, would through any that question Android thought does Android general Is that that quarter of low business Do March turn said business general true? the think to March and about in you is linearity the And you last or be you sort China that year December implications quarter

Kris Sennesael

Yes.

are for the that's quarter think year then will as June China, back then I of going in sure, seeing I December some still Samsung Xiaomi fair. start XXXX. calendar was Vivo, in certain inventory as especially this the will March a through half improvements continue process. But and and we burn-off well to remain think low low. extent, to

Chris Caso

inventory revenue do expect on I in That's about of out, know markets lot over you rate? next the can markets through expect broad get -- expect get correction prospects the so two I'm faster business to a helpful. do growth two it. percentage you relative markets? And you at a what you at And that rates Got now, mobile the or maybe mobile between broad the expect the this the mobile a right look to business. little But revenue? maybe and as term, what spoken we years a after we business that's broad you've that longer be as going years be sorry, content do to you grow the the

Liam Griffin

we're teens, would can be be air line we and top like expecting in in I look markets line, the Chris, cleaned, obviously, for when definitely, Yes. -- what I do, our what given the top products we double-digit markets sure, and will the mid-level broad stronger. gets the believe, should

a brought I shape. the be know are a technologies opportunity. best to that there's on the really doing, customers they're what great the in even in up think but being then haven't there's side, in lot people of we're world mobile that lot going mobile of incredible and yet, And and unique seen invention

technologies make For the those technologies right we and types technologies. of are that the

lot So really we're again, right the We working nice know A call diversification cash our right theme, capital. the already. is playing of then the the to people. with, in talked free CapEx And in another point. steps nicely. about Chris, us behind on We is key flow which disciplined a doing. a what now. with I It's mobile, strength It's combination our going great not is think We've easy. have approach. made we're We're

our four for example, satellite, revenue we hundreds of or Think of three You didn't you of that the dollars markets. broad ago. questions about automotive about millions have look heard years at

but here bit That that more going connected through is roll of an we to technologies unfortunate and now more new are all the it. and of as extrapolation see we’re core a to across you're really those business. have And So cemented, wins broad second we've applications. -- of a It's that market -- set of but driving can really we're devices, is just go in go is take the now we ready kind stock will mobile this we great of been we and out slowdown that year design emerging, that's in have got right the as the for sure. a and of half that

Operator

from next from the Your line Karl comes BNP of question Paribas. Ackerman

Karl Ackerman

I if questions, Two may.

your concerns of as But was snapback you and of China content little exposure not could China a peers have to when why concerns I have you that as recovers. be follow-up. I may you of a much the lost perhaps know those have address I might is eventually First, so demand hoping won't you now. right Android one warranted? some receive investor

Liam Griffin

roll I'm asked question. you to with We're mean I Android. the ready glad Yes.

technologies. have We the

right? We to see going We of was -- is I mean it. business. bit will have to I already. in our We fill products, the the overhang run there but a abate to discipline overhang there. to not want we're going an is channels, that inventory starting say But

it's that that's And have to I high-quality, top-of-line we're just we move when, you And but happening. -- ready exactly go, can technology tell can't definitely ready. in. product We

And then out. its an huge company. it's and going had pocket vector, up China, haven't markets a But cycle is Xiaomi of on banged So an specifically, Oppo, position in OVX, years that we rolled Samsung through we've in our that inventory got now. unfortunate Vivo, it's and upside just because which really years great own they're those

the demand the want we up. it. But as of to on below more to try the is. teams is talked and quarter, very our ahead you than about revenue to That's we it end, China our didn't that. trying even -- don't we built X%. that, disciplined. meet more could And didn't were market were get And never we see, We last We inventory want sell because need in the than

a it's to. But can for just the It's through do more need of half shareholders. to second appropriate change, if be starting issue. I manage quarter not the macro to improving business And this see think we things will in and So way the issue. very the move to well we really our positioned It's execute. as we execution towards if environment, technology trying we an year, faster not get

Karl Ackerman

may, we I Liam. curious 'XX. I more Kris, you, if for I'm but for content a question And about anything calendar one, the December? driving this of step simple a think suppose, implies down Very if in CapEx in clear, what's big as

Kris Sennesael

Yes. No.

over we As the our years. it been doing five we to relates CapEx, what expect moderate to compared definitely last trend have CapEx to

a relates to that and a leverage capacity place. We the We've lot place, wave in as as especially XX% investments Just were in revenue. capacity. now put to a the to of we reminder, it acoustic we in bulk lot five XX% put have years, of technology-related last of

on We yield are focusing improvements.

putting equipment are on capacity can We die more in without focusing create more shrinks. We place.

of less the of we strong. we strong started capital a as the years more And have CapEx our that really result good year flow a intense of the see that, investments again, you about But little we will We that improve already. moderate, couple bit in very a here. it cash next will And feel make. to help further

flow of in cash strong some fiscal free year. could but remainder flow over we expect cash drive year, based We our again, the this moderate further the CapEx on XX%

Liam Griffin

Yes.

up to Just that our a downhill a in it very kind for spent have run over get technology, brand to merchant tremendous base that, wave or time to So work, and the we capital strategically now a great have, very, in us four facilities, bulk took technologies, site it's acoustic the it great but of that positions stuff. filter and still amount reiterate right? We a We CapEx. -- market. this we available difficult money is last did okay, five own brick-and-mortar, build level new, scale. equipment, from other It's long years, not competency of to the in

a was did the versus We it buy So approach. make make.

you purpose-built those for is back are that solutions and And The for it won't capital purpose-built and now incremental customers. Skyworks next developed we our up so three humming the are running. news CapEx four It's level the or spend And be because at scale several great last there'll that at look over investments is the be along. running. the but in years, sure, in-house, and

Operator

line from from Research. of Simpson question Arete Your next comes Brett the

Brett Simpson

then scale X X seems comes It business to I these XG using WiFi RF do should a ramp wanted be think Release new going Release on how devices. your to and we start maybe to it about XX versus you you perspective, and And Liam, X the upgrades, smartphones today's content from consumer get broadly, up changes. WiFi devices? and also they're overall gigahertz. to to just XGPP think when in And XX when when quite particularly big perspective architecture more

which was Skyworks to about I could curious this you extent benefit. how just the and think So

Liam Griffin

and that's words. emerge add great to starting you a now, and Those in-tandem good The making been they that No, for your here do complexity, us just great deal question. technologies investments we've a Yes. in that is news of are mentioned and technology.

WiFi complexity opportunities going we've there launch the kind has for the WiFi the of and X. its incredible to of And set incredible that's been own pad got, So cycles new and the from of newest cycle on XE and and the and that X has course, devices us.

So hit on IoT connectivity line. that we other adjacent back and definitely could the then connectivity nodes,

broad deliver big of to types the And part our a would those that technologies portfolio. we market be solutions. can end market So of

the stages, in a had wins of that design And we and trusted partnership. good with some most have players already at we've space, relevant them earlier

year, So opportunity it's to but into out. 'XX look further definitely get 'XX, for into 'XX, definitely the an we as us

leverage. But definitely would be amazing. perspective, another a as challenging but benefit technology from more there cycle said that we earlier, consumers And can you much the

of do. their devices. cycles the technologies, We've new know-how within got those they create next own IoT to can they're set the hard IP, think we've got I So the and

Brett Simpson

a example, just WiFi side in gigs a is MIMO and there quite think I lot X,for changes mean, the -- the meaningful of I modulation and step-up X content, Liam side. And on

should don't here any can there's the So numbers of you if in X. fairly be a healthy upgrade IF with to WiFi assuming I'm this know on step-up I us content base. sort

Liam Griffin

Yes. but No, numbers, it's meaningful. the hard it's to handicap

through. going WiFi of kind to done And long X. you're think from step of pretty X being work it's There's a a there. from I lot

a lot And technology so being work embedded. means of also

-- But could So you've we XX% got get if user kind to up, whammy. a the I on get also double And segment. content. of that's we then think CAGR then XX% a count that just on

of looking we're to incremental. that's is going what So way for the and be anything along kind there

Brett Simpson

just quick maybe And one for one Kris.

think going the talk should your addressing moderating. for And about a bit capacity BAW technology? filter, on able CapEx that with more X are forward? Just where today? BAW you we BAW gigahertz Can to looks And Skyworks how address you the about

Kris Sennesael

in year, keep operation, our And we that the Again, bulk have. as million we're expanding if and have, capacity, of And equipment more of last fit. the majority believe per where leveraging base small do not a we of installed at look we you we filter was CapEx base, wave of done. our expanding over mean we're die focusing operational from are yield that I shrinks, and the efficiencies, million, to Yes. that us going from gives we again the capacity see acoustic revenue $XXX now continue will that, has into bulk doubled lot years strongly. driving very doubled that there. to when for in will place needed. filters which CapEx not vast the a devices if on and doubled course, $XXX the And hesitate more acoustic ready we're the wave to and really Again, we grow put capacity in that couple going improvements,

Operator

Sandler. next of Your comes the Kumar Piper Harsh from from question line

Harsh Kumar

me to the is it, I results, of about question incredible know I'm with tired sure you that Very hopefully turbulent let topic. ask be on but honest last Liam, you, this this China. environment. you're in this

completely around. China go de-risked last You’ve

remind maximum X at the got just playing over peak, last really the it and to, it much of percentage to us think let's let's But say, close you the gauge zero. think what China how want very I And this if the even say, you business, was the and to message it of a you do where sales. volatility, is? I what want you're given was as after. nature you're do that the can going opportunity geopolitical years,

Liam Griffin

anybody We'll that always been Yes, yes. work Good we'll with -- we've partner needs technology. question. with anyone. our Well,

here. isn't we're There's But no and space. right? our you the opportunity It's is around doing And with go and -- that peers business opportunity. a volatile Huawei market is about of why been a as of China ourselves reason to for we're things a situation lot So U.S. markets. I companies even some our for I challenge, anybody, and applicable has any for technologies shutting kinds COVID operationally back was bias think, as there a where mean the the the that in Huawei in that work of going good is the all and on. any been down, think the really China going big in But to

been know-how unfortunately, it on labs, a us the that how general, to in Skyworks, weighs those this aren't we've and our back kind and of bit That's out run there all business. the just and had our that I not Skyworks, efficiencies kind sync the some you've markets It's inventory would about, about but -- turning operational But words. here overhang. say. heard created just sector, inventory talk of we And of approach. specific where got not But to an of talked fabs

on for what we're doing to important to with So be in That's us. want with just we case market, We stay we're very a sync also partners, is this keen that great our right? the really now. want customers. And but like

lot of There that situation were China impede of we've that some I a of where is. in There that's engagement. the and was market inventory. And lockdowns. got in the were natural would that think flow kind a revenue where things

ready in. standing to step we're back So

a a not do. to even really. we're margin managing It's sure and inventory the right technology not gross that issue. issue delivering to we about cadence. making what be have It's We That's to the it's able -- want

have as to tell populate would there of things and will you we will I markets really that anything Things the dialogue, long that, the kind just said the recover. suite get that technologies we And better we having that better. about solution have. get are out good we So can think start really with

growth the there. grow to point, for and right us flushed the markets deliver and really this bad is opportunity there's -- So those is news incremental at into out

little forward a things looking starting that making bit happen. are I think warm up we're And to already. to So

So exit. we good that we as feel about

Harsh Kumar

fair can Liam, sell it's mostly I similar a look Okay. it you Is that a products So in say to -- just to in not maybe of standard the doesn't different it ask question without lot way way. outside while customers you own too look that leveraging a for Is to what work those already much service facilities. do. about sort it fair effort? of to you then to your think And you China?

Liam Griffin

nodes, its sure, and to and scale through different we flavor and own all the we're it. able every can to mean, business I the I take technologies. higher complex, market or there's Yes. has more technology lower mean of

are over -- markets So the are get going higher of say to going markets I technology. levels the that time, to actually would embrace

advantage. a two, think, is think that I be I will Skyworks, years harder, much talking going now, and much of today have incremental lot stuff three the an we're about like to difficult right companies more

you've think complex sat here and technologies I weren't the that the and wake have as The got So up mobile. users. by we the more But some markets technologies have on a market not the China for to things more that start solved specific macro to challenging gotten more recover, sidelines. powerful and

the there. with have quite catch technology? I that thing not it's sure is the with partners. market, to say been they the So able would we can that that I'm But in I one do up China know

and for need get reason that view. where a demand do not little I business is wouldn't back all us. before we no market a why It's partnership a to I want bit But really in want we it's us It's get the see. a not markets to China. in And mentioned, more issue. where And it's to and and gap have kind technology on supply their China those getting be, that of we with that. think revenue then we it the natural things what the should can to feet opportunity do clear So up

Harsh Kumar

it's March. follow-up, my for And it. Got

there also You a put and to monster this number, going about give what whether us down? curious year know one if something year? happen You onetime before. wins to it of out the CapEx you, XX% sense for XG Or was sense maybe be because is these going bluntly. sustainable are a cash Kris, that's Skyworks? to a XG sense extent units for about can, Is expect I then you year flow free depressed. pretty of number, talked to year be here? this the for content units, up this Units something of content the you you the that a And could probably a

Kris Sennesael

Harsh, then happy December. I'll three the question cash flow flow, to back turn elements. with would and I'll free cash in cash So Very Liam. take it first, say and I obviously, strong the flow very

profitability tax XX% lot that. operating not Our a world-class level, of doing companies base and margin,

yes, great somewhat Secondly, good working bad a a and capital is still elevated. although right? guy, management, Inventory guy

three, item. as the But collections a forward. question. in earlier, flow. over to cash going definitely December strong a discussed and deliver we on and then of little We will which we strong work thirdly, And December to quarter, it combination continue I'll moderate flow, cash of onetime it the is strong time. Liam the in some CapEx And delivered other we'll down had those bit And then turn

Liam Griffin

Exactly. content, yes. The

we now, of lot yes, devices. going content when -- it's with hey, there's about It's really the So the high way and not, the three it the customers the It's new now suite on we're that innovation think devices and we're at about performance thing. had working We're a what's we especially technologies. not seeing with, end. more of same inside. two of It's seeing

of give I'm kind a on improvement. time this Now to going line the this cycle you of not because is

five see is four, years that out versus different. with content we stay question dramatically there's today it. really available high-end is So be a if to smartphone you and on look me But going that. two, no that three, where the at believe one, is We what

-- engagement great the they're Everyone way customers, have there. all spot. of we with get has same a kind We in to different and

be because to that the going units a the where usage and content to say cases continue think more just mean to are expand. the going growth. doesn't are But I they I be So cases phone. are. There'll mobile usage And

through grow. about will you we Skyworks, not and about if IoT an to wirelessly. other many be vectors with all HiFi they're important it connect be is different think an automobile, the technology vector, other about that a continue vectors. it's applications It so the think I think a And cases. solution. There's Mobile to markets you XG, like but right They WiFi technology things technologies center, just connected If could can work mobile. data use

we that see technologies that's to have is own thing path. about cyclical opportunity go is think these that a centers we're and in great devices. uncorrelated other the things really to and an other mobile going which I in more they're data cycle kind annual that automobiles And some interesting the like not in of fine. mobile, that It and their path But the through phone. doesn't on IoT do see are same And of more

doing business in that keep Mobile of back of So mind your great. that moving. the is is because part really the

have continue do super to opportunity But incredible investors We and We're Skyworks the for going for is other the well. an world-class side field solutions. opportunity to of the deliver technologies. our to

So I'll that. leave you with

Operator

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

Liam Griffin

you your Great. in today's Thank call. to care. in conferences. upcoming participation I Take you forward all. appreciate Look seeing

Operator

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

disconnect. now You may

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