QCOM - Earnings call transcript Q2 2022

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Qualcomm Second Quarter Fiscal 2022 Earnings Conference Call. [Operator Instructions].

As a reminder, this conference is being recorded, April 27, 2022. The playback number for today's call is 877-660-6853. XXX-XXX-XXXX. dial please callers, International The playback XXXXXXXX. number is reservation I to Investor Mauricio like to Relations. call over turn the Lopez-Hodoyan, would now Vice President of Mr. Lopez-Hodoyan, ahead. please go

Mauricio Lopez-Hodoyan

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

the In session. question-and-answer addition, will Rogers Alex join

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

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

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

our make SEC including to results statements. business recent or or from We President forward-looking will differ Please future from or to contain results. including of XX-K, actual financial and could now our could materially and events, that differ Executive also refer filings, industry business Cristiano most forward-looking And which trends comments statements, cause in statements. projections our Amon. materially events factors important estimates Officer, from results Chief Qualcomm's Actual the forward-looking to or projected those

Cristiano Amon

you, Thank afternoon, and joining Thanks Mauricio, us today. for good everyone.

conversions for transformative addressable Day decade. that we accelerate. billion to merging driving intersection expansion include enterprise and and growth at $XXX handsets. XG the automotive trends, financial Qualcomm in are beyond PC, and across These They of of of digital home, digital the every connectivity the to greater-than approximately the in technology broad processing transformation only a our As which and mobile is edge, the industries, is shared and generating are continued at November, next Xx last creating outperformance strong have portfolio transformation the Investor our of market spaces, digital demand virtually physical our at of chassis This trends industry. diversification the opportunities

year-over-year business engine across the and entire growth from exceeding and saw record guidance. also end continued earnings QCT, can respectively, our XX%, $X.XX diversification. the chipset of our delivered representing both a our record the company, non-GAAP XX% we reflect and billion of the results, of of our per growth $XX.X you of were billion portfolio. share, and we see $X.X high Revenues As revenues In of strength

These Our RF over more our automotive and all is design $X growth pipeline and grew year-over-year handset QX. edge that billion, drivers with since now year-over-year. is front-end strong XX% up IoT XX% grew win fiscal X demonstrate than strategy consumer, revenues year-over-year, $XX and revenues results categories XX% remain industrial. across unchanged networking growth of billion working. revenues grew our

road is technology incomparable processing wireless one peer group. edge AI connectivity, power-efficient Our and advanced our across across map

the In are fact, processing content silicon advanced intelligence fastest-growing and Qualcomm. for areas artificial

serving is communications defined multiple end can As company such, be a a as the no markets we processor industry, the connected just enabling rather, Qualcomm economy. of edge the company serving new growth cloud-connected and for leading longer one intelligent

to our is chassis win Snapdragon automakers. asset date. we our continue and significant becoming platform, track projections, we progress on expand, now growing increasingly driver pipeline Investor our is a and I provide meet Day update In remain the to As to for on design key will a of digital our an financial automotive, horizontal

solutions earnings Since and across our multiple for Our domains, leading for last continued connectivity, digital digital chassis suite ADAS preferred Qualcomm is call, well partner industry expanded industry system fast auto becoming for scalable cockpit, comprises our With Snapdragon growth. chassis significantly we is and flexible digital expertise the capabilities. positioned telematics, the cloud a services. capabilities platforms and of autonomy open, full and and

open, our solutions X to at ADAS automakers and scale. enhanced acquisition the First, to suppliers integrated Tier competitive arrival fully deliver ability and

policy and assets drive the of acquisition, into result Ride. Snapdragon As a driver are computer assistance vision, we Arriver's incorporating

we platform. to BMW Ride by is extend the co-developed automated Second, long-term OEMs across software scalable Snapdragon solution drive announced other BMW a automotive tiers. to and offered can with The Qualcomm be develop all cooperation jointly and to recently customizable and

computing with which will technology platforms. Stellantis, shifting systems multiyear on vehicles be platforms automotive becoming Stellantis are collaboration for Android brands. will Snapdragon capabilities be increasingly, from automaker's auto to is entry-level PC. Snapdragon premium In also tablets our pleased clear XG XX utilizing the modem of commodity mobile and We validation the demand tools conversions and XG also connected with featuring RF Upcoming our IoT, devices, cockpit collaboration our a based tablets of consumer across telematics

tablets are that inspiring X Tab the Galaxy We series X such Snapdragon pleased flagship Gen the SX as globally. newest

are such This Lenovo ThinkPad XXXS and we features AI powered premium Opel. life announcement OEMs charge. encouraged CPUs to platform. laptop, technology, our high-tier X by NUVIA and premium an Lenovo, Windows see fanless camera and We're focal industry-leading experiences, with the devices as the to in the battery single accelerated up of the ARM of by ThinkPad interest audio broad pleased upcoming the Gen HP also in designed and Snapdragon hours our wave our growing XG enterprise XCX compute a utilizing XX millimeter Additionally, advanced team. new design We're new first-ever on ultra-slim, on by products,

to the school global mobile to future productivity. work, of We industry-leading drive we edge provide ARM-based mesh remote the enabling solutions, WiFi inevitable required from while to and X connectivity WiFi continue continue play, and computing networking, transition for we demand redefining benefit migration X to the and In the for technologies.

will commercial advanced leadership believe With latency and and performance, We believe ultra-low WiFi fastest we solutions multi-gigabit extend position. of unmatched we X also and versatility, spectrum unlock WiFi our which X solution, our the announced industrial will further new era applications. first recently world's a WiFi consumer

than solutions We wireless more XX last by Our a than have solution. or traction broadband continue announced in also OEMs. gain access to more wireless XXX XG access development fixed mile now as fixed designs

growth sensing operators for to XG enable also support our year-over-year features driven extend both We next-generation as RF service XG quarter to and the enterprise. within their for care as home experienced connectivity the such to this accelerated the this revenue quarter, platforms. stand-alone well introduced in offerings suite IoT fastest and demand millimeter Industrial Notably, we by advanced processing industries warehousing, saw devices as handheld edge. logistics robotics for IoT ruggedized at health demand for and continued wave

the smartphone they of billion Going scale driven tier well digital be adopt Honor, of Vivo have consumer Samsung's for for support ecosystem platforms channel In Snapdragon processor forward, choice for Oppo, the for actively transformation critical by industrial the premium an Xiaomi, strategy preference smartphones, the revenues had leading to the to is such of as high-tier Samsung, leadership traction continued become IoT for SXX. validates handsets, volume as and majority Qualcomm continues premium our multiple mobile of and $X.X building SXX significant system Galaxy Samsung's technology up partners and now Galaxy we're Snapdragon of approximately the as of and to XX% platform volume of XX% record integrators brand. from the approximately verticals. our We OEMs where as in we Android. with platform

solutions to define mobile premium continue Snapdragon experiences. Our smartphone

from enabled In connectivity, the antenna the network platform our examples it by highlight best solution X a in and ever, AI, In making AI X smartphone versus RF XG modem camera enabling DxOMark tuning, system, the achieved performance our first features the imaging, highest world's world. AI-based AI selection the engine more. computational Snapdragon generation previous generation. processor doubles performance enhancements, this me our the a Let GEN-X. few In devices in

capture handset the Our Day, the at enabling strategy, and drive as revenue significant ability most portion of leadership. continue gains to outlined RF opportunity. end, share In our RF Investor modem to front is XG enhancing we

such AI dual now connectivity and integration, millimeter RF implements XG advanced spectrum. modem generation wave care in sub-X as aggregation fifth TDD with features Our system sub-X FDD and

expanding for in RF the essential our in IoT. valuable of were forward, industry, automotive of end by above portfolio of releases business, front and driven midpoint and beyond. and to addition and licensing innovations our patent to in In continue guidance develop Looking billion new future most patent into the growth $X.X XG we're we revenues the handsets,

remains to demand initiatives exceed expansion the multi-sourcing towards capacity throughout supply Lastly, and across solutions supply. providing We strong continue high-performance, continue road improvements demand everything our our to and technologies our incremental Technology continue With and all provide year. industries, will our to for and computing wireless. intelligence map all virtually we position and on-device across products One low-power an incredible in are believe

now very to like over on plan would Our turn future excited of Qualcomm. track, call the to for remains I Akash. and the I'm

Akash Palkhiwala

of XX% streams. EPS to strength guidance, These midpoint $X.X decrease you, our margin everyone. delivered third billion for XX%, afternoon, billion and billion, $XX.X another XX% record across driven $X.X of of mix. EBT quarter offset Cristiano, XXX%, revenues results QCT year respectively, units, reflecting We're the increase non-GAAP ago quarter. report revenues of a of the an respectively, QCT were consecutive EBT and of quarter revenue and strong of quarter of and Thank QTL $X.XX. extremely slight was increases billion, with of all and We in $X.X a XX% year-over-year This favorable by good record reflect lower-tier of revenues above results. non-GAAP pleased revenues by versus and second

X doubled quarters. QCT We last now in the year-over-year basis dollars of a on X have EBT

Handset industrial points consumer, increased increased and flagship and products. align of tier end revenues by accelerated these year compared in major Additionally, a by We our $XXX with ability each our surpassed and quarter. internal year automotive year-over-year versus the networking IoT XX% increased revenues the processor of platforms. QCT $X.X technology for growth and launches front-end OEMs. supply meet XX% million, of driven leadership connected revenue diversification. initiatives. versus the improved share IoT as relative Samsung's digital ago was products the growing billion year to guidance on gained ago driven ago increased year-over-year EBT We high growth of to the upside primarily premium revenues of of to SXX, We across the year billion strong quarter. to our demand automotive chipsets XX% of XX% chipset for The edge We volume achieved by $X.X performance supply. our in billion grew XX better margin quarter versus ago period, more with Galaxy demand were with compete than device, RF to of we our and XX% categories intelligent saw XX% Snapdragon cockpit on increased of demonstrating across record a guidance $X.X growth for up devices. and driven saw our by adoption revenues edge our across

Snapdragon than win pipeline design our overall increased of adoption greater chassis, strong the digital to our billion. have now With we $XX

in dividends billion a stock the quarter, announced XX% dividends repurchases. our during and and $X.X we in Lastly, increase returned

cash Our flow deliver highest us free strong investments. that industry the capital to maintaining are flexibility among the for while returns in attractive has positioned semiconductor strategic

I on Qualcomm and of over plans Before Partners turning with for Qualcomm. SSW update the then On sell guidance, Arriver substantially remaining acquisition. several by funded X, will to Arriver quarters. the April $X.X an non-Arriver to businesses transferred Partners all acquired the SSW billion provide Veoneer now to next it

that receive We estimate million the quarter. operating We sale. Qualcomm approximately most per $XX of will Arriver the expect expenses of cash non-GAAP from proceeds

website. fourth Arriver XX-Q However, our in details third until transaction presentation fiscal include to included the our of since Relations report the arrears on Further does for and quarter posted not the in Investor X earnings we our guidance this quarter are plan impact quarter.

Turning to financial for fiscal the guidance third quarter.

revenues to $X.X $X.XX. to margins revenues $XX.X We of are of XX% non-GAAP XX%. estimate of $X.X to billion and of EPS $X.XX QTL to forecasting and billion EBT billion billion We $XX.X

second the end. with to COVID-related the billion the $X.X and mid-single-digit of and IoT Our in this billion we implies estimate and from guidance automotive front the and margins handsets dollar China contemplates XX%. growth exit EBT end basis, XX% expect in units RF of reduction XX% of consistent revenue year-over-year $X.X of sequential seasonal and quarter. assumes EBT in In a of $X.X At growth end global revenues growth fiscal by we the the handset midpoint, rate of quarter QCT, to billion. and revenue a impact On

strong gains non-GAAP for QCT execution in premium same and expenses to In be with by and financial supply IoT forecast is strong we manage volume, investments improvements. benefited strong We closing, the Our including factors driven to are current the handset anticipate reflecting quarter, automotive demand second product select X% sequentially, operating which tier our in our macroeconomic road and we up environment. constraints in X% pleased map. results to as supply in

share 'XX. track And we and processor from XX% increased to in greater on fiscal handset well are are fiscal to as for we content grow 'XX revenues than Our QCT gains. by continue benefit positioned

we as diversification accelerating evidenced Mauricio. the in win the revenue top you. priority design by is for strengthen growth our to and increasing you, in leadership, Thank While Back mobile automotive pipeline company IoT.

Mauricio Lopez-Hodoyan

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

Operator

[Operator Instructions].

comes first Our from question Ramsay Matt Cowen. with

Matthew Ramsay

my Congrats, guys, the guys question Obviously, business. there's going we the the Cristiano, pipeline results. Arriver Day. some billion revisit and first about strong and the back now. on $XX a comes from you on the go deal Stellantis could a if on Analyst acquisition, with I lot automotive wonder assumptions talking

getting I revenue think on a talked you in to $X.X X-year sort about basis. billion guys had of

dramatically. now, pipeline is You're running the that maybe expanded X/X but of

automotive at out strong revenue Analyst maybe how a So that you growth. talk visibility you're for on could Day and about bit numbers that the laid about thinking you the the little

Cristiano Amon

question, think cars good. on you looking that is assets projections. to way should digital about wheels, probably simple carmakers. And the think the resonating even Matt. I computer our really original the becoming your we're Qualcomm question, as winning of the really look, with The it's ahead chassis answer for Thanks connected No, really are of

pretty feel to meet Day. outlined what good we we So Analyst at ability about

Matthew Ramsay

just XXXX in I Cupertino I guys back -- significant at sort guys in pretty revenue think follow-up, either Samsung. the QCT it's about handset XX% phone you the handset while highlighting in way. if out you range go of think talked to I share growing share that a Day, you notable of significant, the expansion the came on even business, a As And Analyst that are guess, that

there way. such guess X questions in to or were ability I that about the a some So through next the Android at time X grow revenue significant years

that you the how about Samsung content And are on is expansion at share trending? Cristiano, expansion RF So attached the at and being and share sustainable? as thinking Samsung

Cristiano Amon

entire pretty end. to before. said It's if AI, we it it wanted can and with what has provide out. a Great modem, CPUs silicon This GPUs, with question, I plus It's Snapdragon Matt. been a front trade we consistent content point Instead I an pretty way. Look, providing actually. that a RF good trade, a of of say positive lot platform

lot outlined with partnership You going the a with flip of probably form and saw that the expect strategy in fold Qualcomm Samsung increase. I only of from think a we GS-XX new making to kind relationship the And the the both was as forward, of the Samsung, And factor our deeper globally. Qualcomm.

working. we're GS-XX. and market share So even high, reflects very I think focused and with think differentiation We've I and pleased. Android it of what reflected technology matters. Snapdragon been And our premium the that's And happened value that the investments, in strategy the that's is on brand and

Operator

next is from Mike Our Genuity. with question Walkley coming Canaccord

Thomas Walkley

your sounds slowing There's question, Matt's to back just just the supply-demand But half the some demand. Cristiano, still wins smartphone about supply. design for to building the your Android or you into ability investor market. kind meet it feel And environment concern how of on industry you about on concern year? of demand about premium talk your to with like or XG Android? trying Can you're the

Cristiano Amon

question, Thanks There's Mike. for a in lot the there.

think both the well think how supply. I design as we about as

So it a is story. in handsets, good

fiscal really that flagship. it's units and with premium Maybe Samsung we're number because at I see a share be market strong. high the share as though a the as the And Akash as XXXX, the comment? bit the of think on we 'XX synonymous gains probably in high order let pipeline We fiscal designs. to our for exposed share it's soft, and been as lower-tier we talk grew story Even year-over-year to is can the We've market. of that of well. not to to if Akash, premium value you China The strategy it And as about look if Akash about the I'll -- and continue -- design talk focused compared And and gains Android of Snapdragon is in outlined, in the with reporting 'XX market. in you very quarter. we're more little XX% of growing XX%. well fiscal

Akash Palkhiwala

Mike, the our saw up. of previous a March our growth our at for said, high softness Yes. quarter you're perspective, driver as show lot some premium And tier. relative value market lower proposition in Cristiano the we and a from of the units. tier to the that revenue in But is strong very expectations the benefit seeing

Cristiano Amon

going The situation the we So supply. second is planned. on supply Mike, question, as

I guidance think probably us have back into across thing consistently. made you're demand the business. than same still hearing contemplating supply Having Day. all said that, our more to Analyst our in We that going projections contemplated you're hear we from that

Operator

Our line with Samik of next question JPMorgan. is coming from Chatterjee the

Samik Chatterjee

Congratulations on for Akash, here. both you a quarter growth QCT just handset start want mentioned with and the XX% Cristiano to year. great I the

that put in flat for year. this down overall the know handsets market can you If is context, or all either we

wondering on much that versus I of trying try XX% think what sort a -- next growth would I'm apples-to-apples much you that Just you of to year. content growth into have can sustainable growth basis. is share capture how is how quantify if how just Then follow-up. to of about

Akash Palkhiwala

it's Akash. Samik,

the at in the drivers address So higher of key maybe a there. terms level I'll question

talked Samsung we increase. share is first about So

that has us premium And the helped so tier. at

able well. to Second is China meet as supply in has improved, the more demand we've been of as

second the driver. key that's So

larger past, mix as the As has we've OEM of a has us. the changed, for portion it said the in up market opened

So at right? of premium to only it's from -- the market, being thing seeing is of global And the the just the come rest handset beneficial. high of able finally, strong portion you're units the to demand then tier. China, still remember XX% so access that also And market is

that. know are look phone. you but us, And up. as to from also for additional participate the finally, a when computing keeps per next going of perspective, competitive not the opportunity And so content well, perspective generation in provides And phones, differentiation that been a content consumers we've amount at one then able just to demanding from that you of an

the even if you're the to content look processor up of generation in you And so phone, on at numbers. show phone because one increase seeing in side, the XG XG our next-generation benefits

Samik Chatterjee

supply and you're to Akash, in of in baking impact my lockdowns thinking of? impact And any maybe on the or how demand should both we sort the China think follow-up, here, of relation that

Akash Palkhiwala

Yes.

a at supply looked demand both perspective. we've So it and from

side, On in expectations, earlier, lower-tier mentioned units decrease our relative some the I to as saw slight demand we in China.

So the we earlier, forward in are numbers market. we're of going I to of as situation our that's it. and monitor China the June said global evolving projecting quarter into continue impact where end a by that recovery is the obviously, in to quarter. But But assume China closely and the an COVID-related XX%

a You lot consumption from still remaining strong XX% trends devices. with positive demand premium for have of seeing a we're the high-tier a where perspective

Operator

Our with next question is Research. coming from Bernstein Stacy Rasgon

Stacy Rasgon

it. I first, mean I everything, strong in COVID hearing you've guess and been quarters, their some prior conservatism with outlook we've and doesn't crushing And in the guess, conservatism, original players the this and outlook. talk about I market really look that's but the maybe in then this China wrong. been environment feel

not us into for So you've I conviction some a guess feeling just the you June. have us in degree given I just this bit, of know And outlook. can little you give

September a levels well. as your gave can we're sounds little today? us just more a here drivers end conviction are markets It maybe color on sitting are You like us little some there, the as bit but the into where you on even give of

Akash Palkhiwala

We guide a Akash. we forward. when going take approach the it's quarters Stacy, Sure. obviously consistent

is past. as do, signals demand a more So we as China we things the is of strong situation coming supply But and we've then the don't taken that and approach together. the done the there those macroeconomic given X in in have that factors upside situation and well. Certainly, same you're are is seeing improving lot the

Stacy Rasgon

it. Got

handsets And said, XX% up you them, my bit you'd sequentially are So would half, year-over-year. color you second in XX% little the some you down handsets. up put follow-up, a linked probably as in gave If just if us XX% just be June. in that applied on September

business So outlook we have September. in a give there any of into qualitative the can either that you little more us the rest for or on quantitative September? Is color

Akash Palkhiwala

going where of you Yes. From a well, flagship as we year know season. have inflection September seeing in it's launches of start for point the we late the us, frame holiday September into quarter perspective, quarter second the August, kind where the time

still at into and to our the we if look So September happen, that Also, plan. quarters. X across performance seeing that's to you our strong quarter, those we're help go going as we expect demand diversification

we out playing had that's better as than So expected. or

quarter. And year-over-year also so front IoT, and we end, areas growth RF the automotive those expect strong in into September

Operator

is Tal coming Liani next America. question of with Our from Bank

Tal Liani

on have two -- margins. was is margin. One It's record quarter I last questions.

much This one. puts should That's quarter, better is quarter, than Entering follow Can takes thought expect going forward? I kind just China up weak. the we And a want just of to be understand China. margins number the of and expected. -- two, on to going again, discuss number you we and what

and are also meaning share China. the Huawei if in hearing, to end loss materializing, and I'm We is wrong, many from is you correct not China miles that selling want still away high in Huawei me I

I dynamics demand the of if and what bit China share you just like to Chinese in So the would elaborate know and is kind can the on are a market. overall what

Akash Palkhiwala

Tal. Sure, Akash. It's

with the performance. and We margin our operating at to we're as it's XX% strong diversify. pleased XX% We're side, well. really drivers handset in us. XX% So make new Gross going to leverage pretty to We're being accretive as the the then And also margin there. guiding guided And markets into XX%, forward a obviously sure of helping see before. XX% well very performance. with that's X the to combination on we margins, doing technology these have numbers. discussed you'll diversification, forecast through Revenue it I'm really able came

we before. all in The as story a out we've and opportunity From perspective, things would across those of combination participating the have the should think we is consistent China. said you with of it's China expected. in OEMs are playing what revenue So

if so participating that's And would Qualcomm be there's OEM a that well. as in winning, particular

Cristiano Amon

So I things. want add is couple Tal, this to a Cristiano. just of

on So us, We're for handsets all, really of it's premium the high first and strategy different. tier. for focused

richer is have our why that, building And a We been preference And in also, impacted we've in that really in the technology and on its we as by all interested mix for had on said we're strong pricing. been margins that that about The But premium in how Samsung, what's on of less differentiation, Snapdragon the been high. by pointed story handset And And business units. think on We're we that units the and we've premium happened contribution very for represented that much regardless benefiting commodity I China low-tier new XX% the of brand. to gross think a of powered not they're handset the the Huawei Having are of margin The business. IoT in the Honor, Qualcomm. business. is auto is disciplined story Akash devices, of tier China such market. XG strong. market, on out the as whether Vivo, devices outlined. Xiaomi, accretive Oppo, I growth think well all as has

Operator

Goldman with coming from next Sachs. Hall question Rod is Our

Roderick Hall

high-end more billion so how question I were would guess which Street, I want the I'm the XX% we your had of assuming different to be then in now on. I wonder mainly about could And this But there. and a needs anticipated bit I revenue number come much of I kind wanted QX, revenues. follow-up. would commentary new above that a to calculate in that Apple is have Android the about how -- way, year just strong maybe very about prior in handsets. that order And be interested confirm $X QCT a And bag at still When than so Android again, much how and think committed? units is exposure book. you if in shipping of to a for for the is developed and do revenue visibility try the ask of that much what we we that buyers in back to then growth you the it's talk implies little I be end given is to

Akash Palkhiwala

past, not it's but quarter with well. driver we consistent happen, would that the as in our benefit So quarter. just you in into numbers flagship the the then seen what launches show of right? see quarter in that Android the Apple Rod, December up have and going in September typically is of that

So that's strong. Android demand be factor. to continues a

information significant of and demand from obviously visibility signal have the our terms demand their We for even in with the changes. reconciling we're getting of all customers, market

forward. as confident pretty we're So we look

Roderick Hall

wanted on Okay. I for just to haven't then -- follow-up, all. Great. And you my touched Europe at

you're European point seeing weakness a little of You sound I'm on demand just give maybe but see But what It going a bit demand talked of color there market from like us about a what developing in you little anything, from some the bit of weakness in perspective. curious up China. a We doesn't Europe. view. on picked in

Akash Palkhiwala

Yes.

weakness with thing only the is Day that's of and lower expectations. before seen highlight at our a had the from when we basis, market. maybe at it's at the way of inconsistent market the way step tier the with to and On had kind really think it you the consistent rest out playing we back the I Investor that global -- the outlined look

Operator

Ross is from next Our with question Deutsche Bank. Seymore coming

Ross Seymore

as just back to my the if you've opportunity the estimates, to if But and on from moving what billion you the handset just already drove than long $XX that, the talked questions. number there? of, and by how growth significantly now? outgrow well you're I the get you the at have is China is XX, it. in The his. wanted GS market like strong Congrats can results. handset that And penetration about Samsung how A say, of Rod XX% great, how about above what XX% said in to I'm sustainability of couple SAM market think more doing so the this parts much gains about much been year share gone will addressed? content really, you is getting fiscal XX% So

Akash Palkhiwala

Yes. Ross, it's Akash.

look forward the improves. side, gain still handset as there we on that we think when share, supply So opportunity especially is to

So driver. would that one be

XG to transition. is Second XG

to on rest ways of market. some have the go the that for We

should out, that benefit should as well. we So see and us that play

earlier, security, performance vectors the terms video added discussed capabilities AI third driver or audio, these amount is is this handset. the the to OEMs. The between that each what being it's competitive these is landscape and all that's CPU needed. of in of processing get GPU, we hard of And It the whether where demanding pushed camera, are

So that increase us those forward. as perspective. is a And from then are helping look drivers also the we content

Ross Seymore

be follow-up the margin guess on the of side I things. would

You EBT have little in the and job curious of margins, the expanding gross both especially QCT great the on a operating near the a done term side you're your margin with in things. The I'm guidance. guys But a QTL. QCT. more is down of overt little gross bit it down couple a on looks precisely, on both like But the guidance points, guiding QCT and

X.X it that. brought of Because parts going unique the is the I moving within X Given margin like kind margins something would But thought seems down on? that, the diversifying like points, engines would up. gross have going the actually is have there something points,

Akash Palkhiwala

Yes.

and So that. even than I certain we we reported, level, gross margin at a in think that came just in the we stronger guided quarter

we're look way well. history, in forward, the kind with the March had line we with as we in our And guiding so guided line more quarter of as recent

right insight -- potential that based mix, number. have So mix on the But a of could good the that's think opportunity have that on we a products. based we now we a

Operator

is from question Morgan Joe Moore coming Our Stanley. next with

Joseph Moore

Great. market? to can imply also had the to sticky shortage handset shift gets going And Or you mix be you to eases? more take prices share. and you aggressive? Do about see are as has as the healthy is market. your talked better, you've the watch? really seen in the more that margin shortage. your premium and element supply any that you've contributed Does I the seen environment competitive price wonder, But this shortage the Obviously, in strength a And pricing way you've that to

Cristiano Amon

Joe. Cristiano. Thanks is question, for Yes. the This

that artificial the on think a a you the GPU, up. XG premium generations for watch Snapdragon just have CPU. in intelligence increasing. next significant tier increase the beyond and of is is It's what processing I amount It's in of now to coming story, content

on content gross the higher biggest processor the in has been side margin of driver So handsets. ASPs and

to leveraged which The design business. as other out, we the other all mobile. pipeline. in to in quarter, accretive margin, in to to $X from technology billion That's the win map And it that to thing the is In I point we road XX% our IoT. we continue automotive, grow in the growth leverage highly one do added want R&D

Joseph Moore

seasonal end royalty those being your up royalty could seeing to And are side. demand, up that we supply imply better Can could does just year. than with first should Great. the have how context us supply And that Nice in on with? if dealing the on strength of chain half side? the correlate that you see overall help the in we're are that I issues and that the follow numbers customers that what solid of pent-up they put if the

Akash Palkhiwala

Yes.

easiest it way total and the about that mix to already market handset the So within that. really then aligning business is to think

both as QTL And impacting quarter. slightly at at the lower what So calendar of the factors to by for guidance we seeing is And for tier out offset units the play Investor forecasted that's had we're Day, as low stronger you'll and mix. calendar XXXX but combination a that's our actuals the recall next units flat XXXX.

Operator

coming is James. with Chris Our question Raymond next from Caso

Christopher Caso

want Samsung your level of is commentary your an you there. sustainable, new speak there. the of Can competition that at internal is competition to Samsung? conviction And this back go this course, keep share now share you had that within that you've the I that gains allows achieved to to what go you've of business you series that forward Samsung Galaxy with Samsung, as and to just the level

Cristiano Amon

relationship in advertising brand high. Samsung I encourage, of those point data you point. are you as that's Qualcomm, said I to a for very many And is Samsung is what's the relationship markets I'll Galaxy to significant that markets And very SXX. us. continue all market. the think And that to Snapdragon now confident think In an with that an actively is Condition expanding as to be we're something I earlier, think, I observe I new ingredient would going happening very to

Christopher Caso

on Day. to impact that on follow-up, to an quite you about when something bit start at hear a you revisit It's wanted and on some that intentions penetrating the that I your a to would and results? us give as And into the the perhaps update market on see notebook Could be able we and with Analyst silicon. that spoke more Qualcomm

Cristiano Amon

the No, question. Thanks for absolutely.

We are on track.

We working many been for Microsoft have years. with

and on for CX I the And before, It's think actually that commercial you'll have designs I for we full enterprise first Lenovo, first you including Windows a have a of quarter first generation is emulation support, enterprise time, our X. ARM. which ready time the did XX, the mentioned is have XX-bit deployments. number launched ThinkPad. -- X with within the platform, We as with

As the our team. track, expect own development are we think going about that's NUVIA developing the in generation, XXXX. enterprise. to designed CPU been high in about the And focus is have for And tier on been and next the performance have we we by late that scale after we

Operator

the Our with from next Blayne of will come Curtis Barclays. question line

Blayne Curtis

handsets, your think pretty to through the in of look wanted per I first XX% the chipset ask all growth if it's I filings. revenue half you, at higher the you much year,

harder. look as So the second at half, compares kind you kind I'm of content the just the of on get curious, obviously,

units starting that But half i.e., down went share mix more which thinking quarter of grow you're content? the -- about in between are think or thinking there supply. second pull you unit you are were I how with Android Just but positive about terms units, to revenue probably the how as growth, you of this kind

Akash Palkhiwala

it's Blayne, Akash.

content, we've China as picked and we're that we seeing at Samsung up We're I which the growth that us. driver for mentioned a improving earlier, in also share is seeing supply. in So discussed the the strength

help in in driver new fall as well. All year. of the happens Also be to a the that of launch phone the Apple combinations typically, would mind that and are time frame, in keep us half second that the these

Blayne Curtis

there, you. the then curious on X is just like IoT, Got tailwinds color And helping, any follow-up, segment? maybe I the mean a but IoT just seeing WiFi you're tailwinds assuming as stuff mix within the

Akash Palkhiwala

Yes.

-- we by year-over-year. reported, total revenue grew as grew IoT So XX%

happy IoT networking, consumer portions look each very by unpack than of course, greater you When and kind you about of enterprise, individually. bit of and it So at XX% grew edge those of a that.

not it's area. growth. So something very in that's broad an concentrated It's

mentioned as us. that which Cristiano really was enterprise good remarks well, As in his growth for strongest the the channel, prepared came from

And think needs I of SAM happen. a that lot area driver that's is is the There's digital in term. ability and presence tremendous that there to our expand a us it effectively to long unlimited. for transformation an our participate

Operator

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

Cristiano Amon

the big And of the say Qualcomm a intelligent you partners. longer a that the Thank about for handsets I the And about to company thank was all thank pleased be Thanks, company the billion. IoT our why Even is communications employees, opportunity all edge. connected everyone, handsets to from $X.X to this to wanted questions of dedicated industry take going alone always processor no also you. on we brilliant love a modems. quarter, I really wanted business. call Yes. that all for for about our how the changing joining Qualcomm handsets the into I us today. part super very and to point in like we're mobile we think just hardworking,

business in we're busy the Thank history. you auto our much. on plus very of of IoT combined you in one opportunities If executing $X our excess billion, at look RF plus and just the biggest

Operator

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

You disconnect. may now

QUALCOMM (QCOM) 28 Apr 222022 Q2 Earnings call transcript