QCOM - Earnings call transcript Q1 2020

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Qualcomm First Quarter Fiscal 2020 Earnings Conference Call.

At this time, all participants are in a listen-only mode. Later we'll conduct a question-and-answer session. [Operator instructions] As a reminder, this conference is being recorded, February 5, 2020. today's (XXX) for number playback call XXX-XXXX. is The XXX-XXXX. callers, please (XXX) dial International is The playback XXXXXXXX. reservation number

I would Mr. to Vice ahead. now like President Mauricio over of Lopez-Hodoyan, to Investor Relations. Lopez-Hodoyan, go turn please the call

Mauricio Lopez-Hodoyan

you remarks Steve prepared Thank will Akash by good Today's Mollenkopf afternoon, call and include Palkhiwala. and everyone.

Rogers Don will Cristiano the join addition, In and question-and-answer Amon, Alex Rosenberg session.

a Relations You can our accompany Investor website. this that access our slide earnings call presentation release and on

be available qualcomm.com In will addition, and being today. on call our this a on is webcast later website replay

the as call reconciliations and find today, financial During website. we will related defined you non-GAAP use the to measures our G, GAAP on in Regulation can

Actual those make also forward-looking future industry business will events events, projected We statements. could business, results. or or materially differ in statements, estimates results including our from projections and trends of financial forward-looking or

including refer to actual most our recent SEC XX-K, materially cause differ our from statements. Please contain could results factors forward-looking to that filings, important which the

Qualcomm's Steve comments now Executive Mollenkopf. Chief And to from Officer,

Steve Mollenkopf

Thank you, and everyone. good Mauricio, afternoon,

pleased business. see are growth led with in share, our the per $X.XX end strong to pleased also our the results revenue quarter high of earnings in chip strength our above guidance non-GAAP by of strong first range, business. year-over-year We're to fiscal report in We licensing

design and/or Virtually front-end including wins for design are RF wins front-end wave, core solutions second-generation see content dollar positive on chipsets our impact Snapdragon addressable of financial with can and X sub using our business new strategy exiting the demonstrating all grow reached solutions. device strong our based of XG you content. from As results, higher-performing our point RF our our QX, a XG key our millimeter fiscal inflection per to XG

outlook. RF we contribute our win As see quarterly to RF the our execute pleased design to results to strength pipeline and our our front-end strategy, of are on we continue

best history. in We position intellectual the property are the and with strong technology and products in a company's leading

beyond for 'XX, XG the cusp extends foundation a transformation industries release roadmap multi-decade digital placing beyond on the of of Our XG the as mobile transformation becomes us increasingly smartphones.

now OEMs QTL, XX Turning Most Chinese signed have X license March license complete with as agreements. the key November. XG work of G extensions end we to recently, license to up through over we signed agreements from we agreements last long-term XX

you Let me time now traction spend some XG updating globally. on

over XG we spanning are commercial XXX XXX spectrum. that both wave operators countries including millimeter nearly launched investing operators As in countries, the year, in services, over the and start in XX XG, XX there have sub-X

wave all we forward, to millimeter in to be regions. continue deployed expect Looking

have Additionally, XG Snapdragon are platforms. more launched our devices, which many than XX OEMs XG commercial or using announced of

side, XXX power we will introduced mobile this many our that year. we smartphones the recently On premium platform expect flagship Android tier product Snapdragon

Mobile modem. XXX platforms XXX Gaming introduced We and an Snapdragon XG integrated also the with

XXX XG or XG With consumers. development, will devices to offerings over spanning price help make in more multiple announced product tiers, our accessible

segments. meet in price expanded We our particularly across lineup enable to new that platforms XG offer mobile also XG demand, tiers multiple economies sophisticated that solutions emerging with our global partners and

December, Of are not sub-X indicator leading last is as three subscribers the X.X XG service XG Carriers planning growth combined just million of wave forecasting for Korean bands. reported all are and the pace Korea a the growth year isolated Korea, to calendar operators in XG Turning XXXX. millimeter see We throughout subscriber frequency expected adoption. XXXX. continued approximately note, to

of Telecommunication in QX device China, The XG sell Turning XXXX. reported Academy China calendar handsets sell-in million December. XX Research to through increased XG in of

XG sell-in Importantly, penetration handset XX% reached December XXXX. in

approximately XG XXX million. smartphone X,XXX RMB of as sales. this At or already address can are approximately China seeing devices XX% priced We point, low domestic USD as

spectrum. wave their X in approximately top build-out is the wave new mobile XG expanding and U.S., the cities millimeter Verizon roadmap XX XX of is deployment is carriers service leading progressing year. well products the the at this device across to and network broadband millimeter In enhanced sub-X with XG

people XXX expects now to and their Sprint X than more United XG network more the States. million XG And AT&T miles by X XG across T-Mobile's square network areas. expanded coverage have million coverage QX. covers than nationwide metropolitan calendar to

would I even XG. in States also on help developments highlight for United will drive two like momentum to spectrum recent greater the that

of well IoT spectrum final began working and suited in First, the that commercial for we industrial band, years taking city approval gave smart enterprise, the of on for ago. CBRS others deployments. and band the sharing FCC is CBRS industry use techniques advantage The

And millimeter the for to wave the FCC's is up spectrum bring additional bid in millimeter the millimeter gigahertz will spectrum of and auction, amount largest latest an X.X up includes second, wave wave ongoing which market. to of auction U.S. ever

year our automotive, success, automotive measure Turning from ago, any impact not to does $X.X as win launched driving Ride. from billion, up autonomous our a our design a platform, now continued over of which recently billion is Snapdragon include $X pipeline

an to benefit Snapdragon We from automotive autonomous expanding level expertise, continued to Ride. our platform, include driving our systems solutions

-- and With of a XXX telematics, adviser become vehicles broad our automakers. history many in-car trusted solutions, have automotive a use connectivity of infotainment to long of automotive million the platforms. leading range Over innovation, we we now world's now including

Ride the We platform look addressable market. ADAS our to significant XXXX. autonomous a and in represents road Snapdragon Snapdragon of seeing solutions Our our ADAS Ride forward expansion on

traction gigahertz the with unanimous spectrum across in vehicle cellular band VXx to We vote, allocating regions. technology. move pleased that gigahertz FCC's Since everything cellular vote the to are are the December with X.X X.X in very band in for forward seeing for we

cloud opportunities continue optimistic we growth IoT, remain always and in AI. about to our connected forward, PCs Looking

the unfold. as continues to coronavirus situation Lastly,

the impacted their by employees with well Qualcomm China, our many are thoughts Our as suppliers, unprecedented and are as customers those situation. this who in families,

time. have with share considered in information we this based will impact limited the the at coronavirus guidance our Akash have the of As you, forward on we

call now to turn would Akash. like I over to the

Akash Palkhiwala

discussion afternoon, earnings. fiscal quarter with good will and first of Steve, you, Thank everyone. a begin I

strong of the above billion demonstrated of revenues $X.X midpoint range guidance. earnings end of high execution our of $X.XX results guidance with our $X.XX, at the per and non-GAAP Our share

by The outperformance $X.X front-end which high of was the and the an of XG, revenues guidance strength range. of in was adjacent in RF above our EBITDA QCT XX%, end quarter platforms billion, margin across with driven

a consisting $XXX MSM repurchases.. XX%, to shipments We of of XXX dividends million the in QTL with high midpoint units returned the million billion, revenues guidance. were and EBIT approximately benefit in year-over-year stock $X.X our $X.X and XX% of of stockholders the quarter, million quarter. of consistent increase margins delivered $XXX during of billion seasonally reflecting a

like global device XG/XG/XG our turn that, to forecast. to I'd With

approximately devices to XXXX. expect continue for We X.XX billion calendar

Our XG billion forecast to to at for This million XXX calendar XXX handsets million X.XX unchanged flat X.XX reflect and XXXX continues double-digit forecast to devices. including growth low non-handsets. remains billion in devices,

walk financial Now guidance. you through our let me

guidance, is our continue be of to end handset our reducing the as of are on billion fiscal to We For uncertainty significant earnings impact the we this the in estimating per and billion range. and situation. time, supply monitor revenues to we widening quarter Based from the suppliers we $X.X contact $X.XX. have share $X.X to we our are remain employees, of in guidance with demand low second the active information the at and customers chain. on $X.XX around There range and non-GAAP coronavirus

billion $X.X to we an revenue of margin of In XX%. fiscal of revenues expect approximately QCT, our guidance The second to billion, EBIT represents $X.X sequentially. growth quarter midpoint XX% XX%

trend our midpoint. launches XX% signals We normal This higher we addition decline reflecting units, from million expect mix estimate is to consistent reflects XXX meaningfully and Sequentially, demand device seasonality to in customers. increased a seasonal million of at revenue sequential the MSM shift MSM shipments XG tier towards be the to per chipsets. with historical with XXX higher, content latest

both the includes guidance RF quarter greater a increase fiscal revenues in basis. front-end Our year-over-year XX% sequential in a second and on than

QTL, fiscal to X% in $X revenues quarter anticipate fiscal and of EBITDA to quarter XX%. expenses $X.X non-GAAP billion the to combined due For sequentially We SG&A seasonality. estimate XX% second be normal with second up to range X% margins of to to R&D billion we be

Looking forward, demand. on the year XG inflection first half inflection the the fiscal see in reflects the points The first two we acceleration of in point strength continue to of XXXX. fiscal

our in with our in with line fiscal trends quarter, quarter second fiscal third historical consistent be expect performance to our We QCT business.

additional We of expect next launch fourth XG to the handsets be quarter with XXXX. in the flagship fiscal the point inflection extend into and

confident capture and remain in RF Analyst our long-term we technology of conclusion, platforms. at into expansion In Day, content outlined adjacent opportunities XG we including our front-end the adoption, growth

I to back call now Thank and you turn the will Mauricio.

Mauricio Lopez-Hodoyan

Operator, for Akash. you, questions. ready we Thank are

Samik Chatterjee

in of some the if I guidance itself and can seasonal off start you the on shipments. unit decline just mentioned kind So

range seasonality move of is sequential had you from and hearing of quarter what impacting shipments XXX if what of to delays this impact? range that that factoring the from walk And terms really you're can the million. wondering OEMs might to that guiding $XXX the just in virus you're the kind in through $XXX that million much of us How of are be kind new million unit you budgeting you terms of to? the So for

Akash Palkhiwala

is this Akash. Samik,

the of a sequential to our seasonality XX% in look consider decline at approximately you years, XX% we've and decline. range And take of if you seen guidance decline, if midpoint previous it's So the the XX%. a

sequential the in largely past. decline consistent with seen it's So have we the

reflects question OEM the on our also that This your of kind also demand that's we currently seasonality. partners. from forecast -- our have So

we're point. so And consistent with that's the at it's this seeing -- also demand

Samik Chatterjee

the can Okay. if And just I then ramp here. follow-up ASP on

take right. $XX ASP MSM a $XX. the have, if you math from So the up unit if doing I'm you're increase, you on to the sequential guidance already average that's the -- you wondering ramp just XX% if sequentially that seems to

your year? RF ASP later because sounded thoughts half you of to what wondering expecting like content looks that the Just like you're it more share if can come about ramp through

Akash Palkhiwala

the it's X to view. Samik, doing increase. ASP Really, there our math you're Yes. drivers consistent are yes, the with right,

of chip launched it. tier devices because First during this happens is benefit is increase improved. and premium new tier time sequential new high our our What launched frame the of the we normal mix are with and

a you and so which shift to tiers, see premium high benefits And us. mix

that's So driver. first the

The gives before content to XG increase RF XG the front chipset in transition core end. coming to second driver is from the the it in, an us with XG, opportunity

have, that a finally, on as that we the guidance. front reflected have talked And we impacting now you incremental core strong as we've on about, that. RF not RF in pipeline, have well. just also then so design being chipset, very because monetization end is win front-end And And but from our

-- I'd RF that front-end also provided data revenue I went through a growth. in script, note I point my on

RF quarter to first seeing so and sequential revenue than -- year-over-year So basis, XX% front we're second growth XX% end basis. in greater on quarter, a both a

now. forecast design pipeline our win the and it's revenue the up So going and

Operator

Mike from comes question with Walkley next Canaccord Our Genuity.

Mike Walkley

building Great. how Qualcomm side? impact on you also xXX year? I update see those just Yes, the do ramps XG for competitive potential of on first, the coming, and questions. maybe for share Cristiano. XG, Can you particularly environment should maybe us the with And guess, ASP Android some of course that share the the over improving on trends? How

Cristiano Amon

the for thanks question. Mike,

So there. there's a lot

a new me impact bit ramp the about the talk chipset. Let just little on the and

on So designs are pipeline is of we our second-generation in said that now design of XXX. our on script now X/X the chipset. number that XGs

Snapdragon. product to increasing. continue trend to traction RF continue in of or And go high we front XG we from first on the we see is traction, second that especially product that see end our So attached as

beginning. expect to we is market. have a the very Competition, since very competition This competitive

in seeing planning not on we're we expected different our competition However, than what assumptions. anything

QCT expect to strong. we So remain share

assumptions new seen we nothing have the there. to it made consistent market, in there's -- throughout is that year, have on We what the and

Mike Walkley

customer, Apple for towards think with be of just seasonal mix? the the coming Great. can ramp And coming it metrics? follow-up and the would that more you model new into ASP is also great. in what trends, QX, Obviously, on about on clarification us again Or on help back laid better ramp? just guidance an a out is X ramp ramp kind XG That unit a more those

Cristiano Amon

Yes.

expect think into front we end. also, the then tiers, tiers, tier, as premium in the One factors. go the just of opportunity high the factor way with the inform then the a factors mid-tier XG a the down the MSM. well as and the but with RF us XG, XG, and revenue going ASP couple of starting is about talked side, a combination to we've eventually later by across of the ASP core we for between X.Xx combination those average we of per chipset go about to the on revenue we So But will year -- how expand from as is

Again, of it's the And question happened average it the then time across X.Xx will the should mix from weighted kind we rule plays XG the fall frame. how as for OEMs same really out the the go launches apply ASP. -- to a and in tiers that that and later XG, flagship drives of

Operator

Our James. next Raymond with question comes from Chris Caso

Chris Caso

first clarification with said what third the Just in to of the is question second And just the fiscal be fiscal you quarter. line guided you a quarter. performance to for

more color assumption some that to together? revenue? as give Is QTL margin Just that, simply Is referring with well? QCT, around that is regard that to a

Akash Palkhiwala

Yes.

the hasn't through quarter. had outlined normal the of for the and the acceleration second in fourth businesses. half to So as Chris, a then up in year, deployment think and of the that as seen an we mean, way of first kind just year last quarter And our quarter, third bit saw couple both playing largely plays year, in In it's little We've call, to the we a in guidance. I the And which our out points of of go quarter we our we from of beyond about it XG changed. the that, kind kind inflection you of shows expected. the view seasonality results the

Chris Caso

now. with All to regard QCT And right.

Just give in couple million quarter. the there. product and following to guidance now then line a midpoint Of sense the questions the XG Can With now? of that units, guess, reasons many had for jump the with you you are XG right the I regard some for big how from you've that, penetration MSM all into ASPs March those us how, mentioned. the the that of XXX of

as the how Is that increase? it to rates year? does get the mature? attach that us something better some some should give perhaps we declines progresses Could be there natural as through expect of you products XG Perhaps, sustainable Is through ASP sense year?

Akash Palkhiwala

Yes.

Akash. So units. happen next to MSM units total not And be launches those the the primarily at months. look over quarter percent we is launches. this in our But way Chris, handset That the that tier, at mostly our the about XG XG and X number where really premium be, down point a the high will and this as breaking new think that expect launches. We're at to is of

be driven XG. volume by the so And those launches would

Cristiano Amon

Chris, this will add just help data to it a to is point answer. to maybe the get Cristiano,

they If and products, think is flagships is you the an which we penetration one December. the products month States, look interesting at some But move China XX% the markets the XG such as they United reached script, on all I high of tier the said device one sell-in in the are requirements XG where today. of

the on address of the already can see some total we XX% price points And the in market points about based China of market. price the

So indicator all XG of this is transition. about good the

Operator

Research. Rasgon the comes Bernstein with next Stacy Our from of question line

Stacy Rasgon

if if QCT coronavirus be a the your MSM I baking guide coronavirus? you wondering want any was in question for explicitly. more What little -- QX was I ask weren't to

Akash Palkhiwala

typically to as that to range. of $X.XX information reduce $X.XX really go to forward. the the it's what a the aware, our have continue into to the demand the guide guidance, from by the and did the Stacy, you're at side, have And at When to we the as information them. that is we But at impact really range we're look we are we what the -- the end you So point. reflect at include monitor on going overall look you MSM this of from we we something guidance factoring we looking have EPS when customers viruses bottom

Stacy Rasgon

Got it.

follow-up, to I ask QCT margins about and QX. into my pricing want For

margin chipset headwind like? MSM out? would So these you're the parts a on guiding X pricing that get there? per I given share like what the going as upside give only of there? Or revenue And with I margins like sequentially. gross flushes XG Like, that's expected that. something up I remainder guiding points. of Why of XG XX%, ASP more What's of like there or going take, up there guess, few you on upside? have look are points, else a Is are that magnitude margins is

Akash Palkhiwala

Akash it's Stacy, again. Yes,

to are the at I outlined indicated what had in think we actually out revenue guiding previous very gave release. profile. numbers XX%. with we and We mid-teens we're had mid-teens a growth consistent XX% earnings And margin a

total And a of consistent I with profitability around the mean, it's as this pricing and well, expectations. environment combination it. very you then know and it's our -- units, the

Operator

with Ross Our next comes Seymore Deutsche Bank. from question

Ross Seymore

on stick maybe slightly MSM the different spin per revenue but of wanted a to to theme take it. I the side,

do per the together you to if guys conceptually that the what job great a driver MSM margin tie to margins. revenue But MSM powerful of in to per or assumptions You the EBT I revenue just the is detail the always then is the of wanted gross most forward, and side accretive AP it the business, are explaining see side? going

And Stacy's be you? to accretive would Because detrimental outcome gross a operating content up? would the margin side something go much to going ASPs up how capping very I similar much that for think would that's or margin question, the guess, there I otherwise is somewhat the the

Akash Palkhiwala

it's of so couple things. a Ross, combination a of

the more on see a see I of to operating but benefit margin. think our MSM, as percent revenue per XG, in move just not we're we the devices to going also

second is The across going we're tiers.

tiers the opportunity across the inflection we and a have second expand scale go further of XG we us. will as for so And point, that

XG. in outlined leverage the expect the realize definitely to Day, Analyst we we at investment from As operating the

our as -- later we inflection the we hit second point in in to forward, as margins. had we especially see, as year, we'll expansion the operating go so And continue

Ross Seymore

QTL over the of follow-up, I things. to my as X guess side moving

said that to I licensees as outlook beyond some think you're whether getting pay that new had Steve to sort with new people XG Does versus or it the in things QTL the March XX do before. or seasonal for anything earlier XX the more quarter revenue XX you those trends, above change to be licenses? the in of you --

Akash Palkhiwala

Yes.

low we structure. as our the perspective, comes would mean, licenses, more we assumed go at and licensees be rates important go a an devices XG convert the QTL critical the is mid that replacement it result benefit especially and that through that's current kind stays Or entire of base from higher of as So tiers, on its happens. to XG comes we've way we to ASP, from I very market XG improved incremental at think through remaining the us licensing us XG to the And to forecast. either the a any as about that something to and planned that's sign XG clearly, and the X transition our and that.

Operator

Our from Matt next question with comes Ramsay Cowen.

Matt Ramsay

And the just this total Or or ramping, that may -- are not commentary units. little you of March may normal be I have Thank fairly both happening? volume of to down the talked on give story? the I much. But share to shifts XX% team very a about business a the numbers guidance, wonder in on of in from you that all and guess, XG a I I with on bit seasonality market caution update know Yes. quarters, could little the a market if basis in if wanted ask look the December is XG you I the bit substantially. back about year-over-year you those

Akash Palkhiwala

these then which we last and for since had of ago, combination volume is models volume them, in is quarters a a year Apple previous the higher it's the Matt, And were a couple we reason decline. Huawei. Yes. second a still one year, shipping to things. In of at

material they scheme us, in them. a of the things, small had While small were for they're a customer customer we with for still us, volume

and would for expect you just what delta when so is the environment. reflects extremely And it small adjust to the market you general those,

Matt Ramsay

reactions at that don't big follow-up, of sort drivers or content. At one I time, business how would Christian the news company And is is just know react? big business seen is you've interesting noncore. juxtaposition in for RF this your Steve. And for an you deeming if your opportunity result of That Got could same as if as that a XG or your my the Maybe the really do of base RF a is share be to future customer one your you just it. growth think helpful. of that the of It's players business?

Steve Mollenkopf

I I continuing for to to building is of get a really and the would this it's some XG, on time us been for see growth tiers. the surprise is story. obviously, grow story, Sure. working opportunity business. a RF to this into This us. Steve. due We're say, We've not side across a to The good it happy good opportunity think,

XG I still think opportunity There's an opportunity obviously an players. the there's side. other for on

competitive In investing There or think finding flow to the definitely our happy features we're resonate talking in it time, great been we've guide. we're been terms actually into with solution. people I and business. what in that about valuable. But it it's the the the some see for customers to dynamic we it the system results customers, and of We've see are can that seeing add, are that in, we're seeing from some

Cristiano Amon

per I'll us, reflected is add this Cristiano. think the our way part MSM. it, Matt, this become about business. is that's going to in Look, And to of the core real for you revenue just one quick. see thing what

on tiers. that go uplift to that especially we and RF expect We forward, the continue we've as seen XG going down

Operator

next Hall question Rod from with Sachs. comes Goldman Our

Rod Hall

channel on what's demand I be kind just quarters over have flow going I exit March? you comment couple as March, might of like look kind you than you inventory. don't think of of wanted But to the of that we higher it. And handset channel there course here. a inventory expectation inventory China, as the know what do will of we in And normal with -- with an on given generally exit like to start

market also competitive see cost thinking be as share share? on that you. wanted and there environment back important important you, about advantages the to how higher kind in that would Steve, we And advantages environment? on to having Obviously, XG could comment ask not come there and you strategic is you are maybe, of And to But I to to are what so you are on. might advantages then other

Akash Palkhiwala

from The perspective, something for mean, us the a we Rob, to channel we inventory key I how monitor. following in situation but closely is XG are driver continue launches. obviously, China, this to that given need is XG and

of it's so from with And end. in OEM front demand, And we're for keep for really how because demand terms up And inventory the have we on we grow. really, at to opportunity us do increasing us base. challenge increasing an our XG, incredible the is

Steve Mollenkopf

I think Yes, share. on

Steve. this think is I --

from normal issue, say, supply tend would seeing us issue it to -- regions only the from think, be ability units share, in tend or anticipate. markets. If a that bit have diversity also, to demand scale I not an have They that more back I they to issue we're to a anything other sell chain China, into benefit, didn't bit not more sell I better of we handsets think geographical we the us scale for from we and feature things. on have a We kind We and capability. in give scale the up. perspective, into but

strength I to different our to going We And that sure of planning. So want we that that's think business markets. us in make maintain serve look tend well. to across the terms we at

Operator

from C.J. Our Muse with next question Evercore. comes

C.J. Muse

wider corona, you're get Just on on follow-up question of this you your guide earlier a a to chipsets question either just trying royalties Akash, tempered right, or to just the range? the or have reflecting EPS midpoint

Akash Palkhiwala

of should clearly as a to that you factor it's something in we range. C.J., it think EPS guidance. our mean, wider I Yes, wanted

but did we end our kind by we normal lower what guide of held $X.XX. moved the is So

Cristiano Amon

helpful. Okay,

As you're up X%. X% X%, revenues my OpEx guiding to follow-up, roughly up

we leverage I So how can through about should And as OpEx calendar walk 'XX spending the think beyond? greater we driving what's operating the proceed on and through guess, side? you

Akash Palkhiwala

Yes.

maybe So to points two it.

year First the by increase on is OpEx expenses. driven resets is calendar employee being side, the for normal

And primary so the that's it's -- driver. really

are plus the where small rate As for to incremental to be expect year, top guidance expect -- we some given we you think exit at it on have full before about be 'XX we of the it. --

we're sticking that. with still so And

have realize allow I us to we and we think the operating if revenue it execute growth our to leverage. margins on the will that expand and side,

Operator

from with Our UBS. next question is Timothy Arcuri

Timothy Arcuri

lot There's on big terms I guess, of the But story. don't the of benchmarks any But front-end there. questions that thought ASPs. a of revenue RF MSM guess, would in I obviously, think early $X your 'XX billion have what piece billion XXXX, really is really And is end. for in fiscal said $X I you roughly to you that revenue front be we RF

end. piece of for sort story. I because it's such did do prior it big are guess, the hinted 'XX, sounds revenue And there. But Can you it fiscal you right maybe us, like, now? in you calls, you of a for in of much sort that where you front anchor get didn't How just RF

there? think you're want doing If well, some so us give to numbers you I would

Akash Palkhiwala

point, on since this And have giving not of you while front the RF mean, of ago. Yes, opportunity kind market breakdown we're top the kind our RF has changed RF At front-end then. revenue our grow points Tim, Akash. the I And base. business just XG. a from and of grown is a end to this we've transaction XXX of incredible through data

opportunities we go to more look at about providing takes we'll But we're So us, data to provide you. forward point, for this and where excited it any we're not as additional information.

Timothy Arcuri

Okay.

based back expenses of it do Is looks the range how like QTL. I of QTL trajectory $XXX the related million the the of $XX they about in expense think by particularly appeal? in and question margins legal million a of that in guess they're And per quarter. business? ramp OpEx the that up sort I you had And sort all in bottomed guidance, to mid back through about year the Okay. on ramping on then, September. in But

Akash Palkhiwala

Yes.

OpEx the for we're the at forward. scale the for if necessarily it and looking expense state. as So going at use mean, is QTL, look expenses point, the to about really forward as this largely and actuals not quarter the to that think going steady it's -- basis the see we way litigation first business and I

normal You kind the And the get really year, is and OpEx. of how declines. flat impacted. then -- will the some But based that changes shape it's will revenue how see on margin that through will increases

Operator

of Pajjuri question The Securities. Srini SMBC Nikko with next the comes from line

Srini Pajjuri

there. is, I'm on question of high Akash, here. questions. ramping suspecting getting margin ASP most XG XG to the know I'm almost margin, is, of I of flattish tier. my couple question close is A model, questions the gross My you're gross XX% and increase initially a I obviously, My lot with think

we levels? actually through is a ramp and year saying mid low-tier, the can at you and more at that that gross go comfortable margins margins there decline? are gross could risk As as these least remain Or you

Akash Palkhiwala

operating should that improve or the our we've And transition we're Yes. to not margin those XG, an previously way hold we of margin giving factors with guidance as meet provided, we to margins. then XG about structure. us to perspective, able is our But leverage allow long-term really be OpEx Srini, we combination from on the think should guidance. operating gross really, guidance from

Srini Pajjuri

to Any RF mix give it. end what where Got And Cristiano. RF, us And modem wave? of percent going the maybe millimeter as idea majority the you said that do you Cristiano, an year? the design wins are for of solutions. to the is see the using then of using way by on your vast

Cristiano Amon

for operators the we working at for of see towards are millimeter and the year, of this question. we wave a as wave majority Right launch Thanks the Korea. the States millimeter Japan requirement United in now, least

be expect have start optimistic other see by such devices well. to view So that And as to and into we're Europe. that as China we requirement a geographies on XXXX going to we to an start that going

and a Korea So States, XXXX story. is United Japan

Operator

turning anything call? concludes have do Thank further you. Mr. the question-and-answer to That Mollenkopf, before today's you session. add

Steve Mollenkopf

Yes.

forward that hard I you, work. flow into next the Thank year. know number employees and the spent I continuing great as everybody Qualcomm We So on talk all for a results the to last XG, lot, to of just one, look financials. It's see a going to through everybody. the to driving that you in lot thanks appreciate call.

Operator

call. Ladies and conference today's concludes gentlemen, this

may You disconnect. now

QUALCOMM (QCOM) 5 Feb 202020 Q1 Earnings call transcript