Skyworks Solutions 10Q 2022 Q2 Quarterly report

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended April 1, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________to__________

Commission file number 001-05560

Skyworks Solutions, Inc.

(Exact name of registrant as specified in its charter)



Delaware			04-2302115
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

5260 California Avenue	Irvine	California	92617
(Address of principal executive offices)			(Zip Code)


			(949)			231-3000
			(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.25 per share	SWKS	Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. þ Yes ¨ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). þ Yes ¨ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer ☐

Non-accelerated filer ☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes þ No

As of April 29, 2022, the registrant had 160,926,134 shares of common stock, par value $0.25 per share, outstanding.

SKYWORKS SOLUTIONS, INC.

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTER ENDED April 1, 2022

TABLE OF CONTENTS

Table of Contents

PART 1. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

SKYWORKS SOLUTIONS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited, in millions, except per share amounts)


	Three Months Ended				Six Months Ended
	April 1, 2022		April 2, 2021		April 1, 2022		April 2, 2021
Net revenue	$	1,335.6	$	1,171.8	$	2,846.0	$	2,681.8
Cost of goods sold	698.0		593.4		1,493.6		1,341.7
Gross profit	637.6		578.4		1,352.4		1,340.1
Operating expenses:
Research and development	160.7		130.7		311.9		252.3
Selling, general, and administrative	83.0		70.2		165.1		136.9
Amortization of intangibles	21.9		2.8		55.2		5.5
Restructuring, impairment, and other charges	4.7		—		7.1		—
Total operating expenses	270.3		203.7		539.3		394.7
Operating income	367.3		374.7		813.1		945.4
Interest expense	(11.4)		—		(22.3)		—
Other income (expense), net	(1.8)		0.8		(0.5)		0.9
Income before income taxes	354.1		375.5		790.3		946.3
Provision for income taxes	48.3		50.5		84.6		112.0
Net income	$	305.8	$	325.0	$	705.7	$	834.3
Earnings per share:
Basic	$	1.87	$	1.97	$	4.29	$	5.05
Diluted	$	1.86	$	1.95	$	4.27	$	5.00
Weighted average shares:
Basic	163.7		165.0		164.4		165.2
Diluted	164.4		166.8		165.4		166.9

See accompanying Notes to Consolidated Financial Statements.

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SKYWORKS SOLUTIONS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited, in millions)


	Three Months Ended				Six Months Ended
	April 1, 2022		April 2, 2021		April 1, 2022		April 2, 2021
Net income	$	305.8	$	325.0	$	705.7	$	834.3
Other comprehensive income (loss), net of tax:
Fair value of investments	(0.3)		(0.1)		(0.4)		(0.3)
Pension adjustments	—		—		3.3		0.3
Comprehensive income	$	305.5	$	324.9	$	708.6	$	834.3

See accompanying Notes to Consolidated Financial Statements.

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SKYWORKS SOLUTIONS, INC.

CONSOLIDATED BALANCE SHEETS

(In millions, except per share amounts)


	As of
	April 1, 2022		October 1, 2021
ASSETS	(unaudited)
Current assets:
Cash and cash equivalents	$	656.4	$	882.9
Marketable securities	118.4		137.2
Receivables, net of allowances of $0.8 and $0.7, respectively	798.1		756.2
Inventory	928.2		885.0
Other current assets	274.4		204.1
Total current assets	2,775.5		2,865.4
Property, plant, and equipment, net	1,578.4		1,501.6
Operating lease right-of-use assets	207.9		166.1
Goodwill	2,176.8		2,176.7
Intangible assets, net	1,565.7		1,698.6
Deferred tax assets, net	107.7		119.5
Marketable securities	3.4		7.1
Other long-term assets	96.2		55.7
Total assets	$	8,511.6	$	8,590.7
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	296.3	$	236.0
Accrued compensation and benefits	121.9		135.3
Other current liabilities	278.4		287.2
Total current liabilities	696.6		658.5
Long-term debt	2,187.3		2,235.6
Long-term tax liabilities	209.3		222.8
Long-term operating lease liabilities	198.9		144.5
Other long-term liabilities	30.9		32.2
Total liabilities	3,323.0		3,293.6
Commitments and contingencies (Note 9)
Stockholders’ equity:
Preferred stock, no par value: 25.0 shares authorized, no shares issued	—		—
Common stock, $0.25 par value: 525.0 shares authorized; 166.9 shares issued and 161.7 shares outstanding at April 1, 2022, and 165.3 shares issued and 165.3 shares outstanding at October 1, 2021	40.4		41.3
Additional paid-in capital	218.1		79.6
Treasury stock, at cost	(772.7)		(1.7)
Retained earnings	5,707.8		5,185.8
Accumulated other comprehensive loss	(5.0)		(7.9)
Total stockholders’ equity	5,188.6		5,297.1
Total liabilities and stockholders’ equity	$	8,511.6	$	8,590.7

See accompanying Notes to Consolidated Financial Statements.

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SKYWORKS SOLUTIONS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in millions)


	Six Months Ended
	April 1, 2022		April 2, 2021
Cash flows from operating activities:
Net income	$	705.7	$	834.3
Adjustments to reconcile net income to net cash provided by operating activities:
Share-based compensation	106.1		100.8
Depreciation	192.6		158.2
Amortization of intangible assets, including inventory step-up	153.3		17.5
Deferred income taxes	6.4		(3.6)
Amortization of debt discount and issuance costs	2.0		—
Other, net	1.4		—
Changes in assets and liabilities:
Receivables, net	(41.9)		(100.5)
Inventory	(51.4)		61.8
Accounts payable	15.0		3.7
Other current and long-term assets and liabilities	(114.7)		28.6
Net cash provided by operating activities	974.5		1,100.8
Cash flows from investing activities:
Capital expenditures	(222.5)		(259.8)
Purchased intangibles	(14.0)		(5.9)
Purchases of marketable securities	(78.6)		(308.1)
Sales and maturities of marketable securities	100.7		358.9
Net cash used in investing activities	(214.4)		(214.9)
Cash flows from financing activities:
Repurchase of common stock - payroll tax withholdings on equity awards	(83.6)		(51.3)
Repurchase of common stock - stock repurchase program	(687.4)		(195.6)
Dividends paid	(183.7)		(165.6)
Net proceeds from exercise of stock options	2.6		7.1
Proceeds from employee stock purchase plan	15.5		12.7
Payments of debt	(50.0)		—
Net cash used in financing activities	(986.6)		(392.7)
Net increase (decrease) in cash and cash equivalents	(226.5)		493.2
Cash and cash equivalents at beginning of period	882.9		566.7
Cash and cash equivalents at end of period	$	656.4	$	1,059.9
Supplemental cash flow disclosures:
Income taxes paid	$	138.4	$	73.7
Interest paid	$	18.8	$	—
Incentives paid in common stock	$	32.2	$	27.5
Non-cash investing in capital expenditures, accrued but not paid	$	77.3	$	124.3
Operating lease assets obtained in exchange for new lease liabilities	$	57.2	$	13.3

See accompanying Notes to Consolidated Financial Statements.

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SKYWORKS SOLUTIONS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In millions)


	Shares of common stock	Par value of common stock		Shares of treasury stock	Value of treasury stock		Additional paid-in capital		Retained earnings		Accumulated other comprehensive loss		Total stockholders’ equity
Balance at October 1, 2021	165.3	$	41.3	—	$	(1.7)	$	79.6	$	5,185.8	$	(7.9)	$	5,297.1
Net income	—	—		—	—		—		399.9		—		399.9
Exercise and settlement of share-based awards, net of shares withheld for taxes	0.9	0.2		0.5	(80.1)		33.8		—		—		(46.1)
Share-based compensation expense	—	—		—	—		42.0		—		—		42.0
Stock repurchase program	(1.7)	(0.4)		1.7	(269.4)		0.4		—		—		(269.4)
Dividends declared	—	—		—	—		—		(92.5)		—		(92.5)
Other comprehensive income	—	—		—	—		—		—		3.2		3.2
Balance at December 31, 2021	164.5	$	41.1	2.2	$	(351.2)	$	155.8	$	5,493.2	$	(4.7)	$	5,334.2
Net income	—	$	—	—	$	—	$	—	305.8		—		305.8
Exercise and settlement of share-based awards, net of shares withheld for taxes	0.2	—		—	(3.5)		16.3		—		—		12.8
Share-based compensation expense	—	—		—	—		45.3		—		—		45.3
Stock repurchase program	(3.0)	(0.7)		3.0	(418.0)		0.7		—		—		(418.0)
Dividends declared	—	—		—	—		—		(91.2)		—		(91.2)
Other comprehensive loss	—	—		—	—		—		—		(0.3)		(0.3)
Balance at April 1, 2022	161.7	$	40.4	5.2	$	(772.7)	$	218.1	$	5,707.8	$	(5.0)	$	5,188.6








Balance at October 2, 2020	165.6	$	41.4	66.7	$	(4,093.5)	$	3,403.7	$	4,820.4	$	(7.8)	$	4,164.2
Net income	—	—		—	—		—		509.3		—		509.3
Exercise and settlement of share-based awards, net of shares withheld for taxes	0.7	0.2		0.4	(47.8)		30.1		—		—		(17.5)
Share-based compensation expense	—	—		—	—		37.4		—		—		37.4
Stock repurchase program	(1.4)	(0.4)		1.4	(195.6)		0.4		—		—		(195.6)
Dividends declared	—	—		—	—		—		(83.0)		—		(83.0)
Other comprehensive loss	—	—		—	—		—		—		0.1		0.1
Balance at January 1, 2021	164.9	$	41.2	68.5	$	(4,336.9)	$	3,471.6	$	5,246.7	$	(7.7)	$	4,414.9
Net income	—	—		—	—		—		325.0		—		325.0
Exercise and settlement of share-based awards, net of shares withheld for taxes	0.2	0.1		—	(3.6)		16.9		—		—		13.4
Share-based compensation expense	—	—		—	—		41.7		—		—		41.7

Dividends declared	—	—		—	—		—		(82.6)		—		(82.6)
Other comprehensive income	—	—		—	—		—		—		(0.1)		(0.1)
Balance at April 2, 2021	165.1	$	41.3	68.5	$	(4,340.5)	$	3,530.2	$	5,489.1	$	(7.8)	$	4,712.3

See accompanying Notes to Consolidated Financial Statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

Skyworks Solutions, Inc., together with its consolidated subsidiaries (“Skyworks” or the “Company”), is empowering the wireless networking revolution. The Company’s analog semiconductors are connecting people, places, and things, spanning a number of new applications within the aerospace, automotive, broadband, cellular infrastructure, connected home, entertainment and gaming, industrial, medical, military, smartphone, tablet, and wearable markets.

The accompanying unaudited interim consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial reporting. Certain information and footnote disclosures, normally included in annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), have been condensed or omitted pursuant to those rules and regulations. However, in management’s opinion, the financial information reflects all adjustments, including those of a normal recurring nature, necessary to present fairly the results of operations, financial position, and cash flows of the Company for the periods presented. The results of operations, financial position, and cash flows for the Company during the interim periods are not necessarily indicative of those expected for the full year. This information should be read in conjunction with the Company’s financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the fiscal year ended October 1, 2021, filed with the SEC on November 24, 2021, as amended by Amendment No. 1 to such Annual Report on Form 10-K, filed with the SEC on January 28, 2022 (“2021 10-K”).

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts of assets, liabilities, revenue, expenses, comprehensive income, and accumulated other comprehensive loss that are reported during the reporting period. The Company evaluates its estimates on an ongoing basis using historical experience and other factors, including the current economic environment. Judgment is required in determining the reserves for, and fair value of, items such as overall fair value assessments of assets and liabilities, particularly those classified as Level 2 or Level 3 in the fair value hierarchy, marketable securities, inventory, intangible assets associated with business combinations, share-based compensation, revenue reserves, loss contingencies, and income taxes. In addition, judgment is required in determining whether a potential indicator of impairment of long-lived assets exists and in estimating future cash flows for any necessary impairment testing. Actual results could differ significantly from these estimates.

The Company’s fiscal year ends on the Friday closest to September 30. Fiscal 2022 consists of 52 weeks and ends on September 30, 2022. Fiscal 2021 consisted of 53 weeks and ended on October 1, 2021. The three and six months ended April 1, 2022, and April 2, 2021, each consisted of 13 weeks and 26 weeks, respectively.

2. REVENUE RECOGNITION

The Company presents net revenue by geographic area, based upon the location of the original equipment manufacturers’ (“OEMs”) headquarters, and by sales channel, as it believes that doing so best depicts how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. Individually insignificant OEMs are presented based upon the location of the Company's direct customer, which is typically a distributor. Net revenue by geographic area is as follows (in millions):


	Three Months Ended				Six Months Ended
	April 1, 2022		April 2, 2021		April 1, 2022		April 2, 2021
United States	$	824.0	$	635.0	$	1,817.9	$	1,736.6
China	154.6		285.1		388.9		497.7
South Korea	157.3		66.4		252.3		134.3
Taiwan	114.7		132.6		224.7		220.1
Europe, Middle East, and Africa	65.3		45.4		122.2		79.2
Other Asia-Pacific	19.7		7.3		40.0		13.9
Total net revenue	$	1,335.6	$	1,171.8	$	2,846.0	$	2,681.8

Net revenue by sales channel is as follows (in millions):

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	Three Months Ended				Six Months Ended
	April 1, 2022		April 2, 2021		April 1, 2022		April 2, 2021
Distributors	$	1,057.5	$	1,044.3	$	2,371.1	$	2,415.2
Direct customers	278.1		127.5		474.9		266.6
Total net revenue	$	1,335.6	$	1,171.8	$	2,846.0	$	2,681.8

The Company’s revenue from external customers is generated principally from the sale of semiconductor products that facilitate various wireless communication applications. Accordingly, the Company considers its product offerings to be similar in nature and therefore not segregated for reporting purposes.

3. MARKETABLE SECURITIES

The Company's portfolio of available-for-sale marketable securities consists of the following (in millions):


	Current				Noncurrent
	April 1, 2022		October 1, 2021		April 1, 2022		October 1, 2021
U.S. Treasury and government	$	7.1	$	7.6	$	3.4	$	6.0
Corporate bonds and notes	103.4		117.0		—		—
Municipal bonds	7.9		12.6		—		1.1
Total marketable securities	$	118.4	$	137.2	$	3.4	$	7.1

The contractual maturities of noncurrent available-for-sale marketable securities were due within two years or less. Neither gross unrealized gains and losses nor realized gains and losses were material as of April 1, 2022, and October 1, 2021, respectively.

4. FAIR VALUE

Assets and Liabilities Measured and Recorded at Fair Value on a Recurring Basis

The Company groups its financial assets and liabilities measured at fair value on a recurring basis in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. These levels are:

•Level 1 - Quoted prices in active markets for identical assets or liabilities.

•Level 2 - Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets with insufficient volume or infrequent transactions (less-active markets), or model-driven valuations in which all significant inputs are observable or can be derived principally from, or corroborated with, observable market data.

•Level 3 - Fair value is derived from valuation techniques in which one or more significant inputs are unobservable, including assumptions and judgments made by the Company.

Assets and liabilities recorded at fair value on a recurring basis consisted of the following (in millions):


	As of
	April 1, 2022								October 1, 2021
			Fair Value Measurements								Fair Value Measurements
	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
Assets
Cash and cash equivalents*	$	656.4	$	634.6	$	21.8	$	—	$	882.9	$	882.9	$	—	$	—
U.S. Treasury and government securities	10.5		—		10.5		—		13.6		2.6		11.0		—
Corporate bonds and notes	103.4		—		103.4		—		117.0		—		117.0		—
Municipal bonds	7.9		—		7.9		—		13.7		—		13.7		—
Total assets at fair value	$	778.2	$	634.6	$	143.6	$	—	$	1,027.2	$	885.5	$	141.7	$	—

* Cash equivalents included in Levels 1 and 2 consist of money market funds and corporate bonds and notes, commercial paper, and agency securities purchased with less than ninety days until maturity.

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Assets Measured and Recorded at Fair Value on a Nonrecurring Basis

The Company’s non-financial assets and liabilities, such as goodwill, intangible assets, and other long-lived assets resulting from business combinations, are measured at fair value using income approach valuation methodologies at the date of acquisition and are subsequently re-measured if there are indicators of impairment. There were no indicators of impairment identified during the three and six months ended April 1, 2022.

Fair Value of Debt

The Company’s debt is carried at amortized cost and is measured at fair value quarterly for disclosure purposes. The estimated fair values are based on Level 2 inputs as the fair value is based on quoted prices for the Company’s debt and comparable instruments in inactive markets. The carrying value of the Term Loan approximates its fair value as the Term Loan is carried at a market observable interest rate that resets periodically.

The carrying amount and estimated fair value of debt consists of the following (in millions):


	As of
	April 1, 2022				October 1, 2021
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
0.90% Senior Notes due 2023	$	498.5	$	489.8	$	498.2	$	501.0
1.80% Senior Notes due 2026	496.4		463.1		496.2		507.5
3.00% Senior Notes due 2031	494.2		448.5		494.0		514.6
Total debt	$	1,489.1	$	1,401.4	$	1,488.4	$	1,523.1

5. INVENTORY

Inventory consists of the following (in millions):


	As of
	April 1, 2022		October 1, 2021
Raw materials	$	61.5	$	62.2
Work-in-process	637.7		595.9
Finished goods	225.1		224.4
Finished goods held on consignment by customers	3.9		2.5
Total inventory	$	928.2	$	885.0

6. PROPERTY, PLANT, AND EQUIPMENT, NET

Property, plant, and equipment, net consists of the following (in millions):


	As of
	April 1, 2022		October 1, 2021
Land and improvements	$	11.9	$	11.9
Buildings and improvements	515.6		470.7
Furniture and fixtures	67.4		60.2
Machinery and equipment	3,190.1		2,990.2
Construction in progress	180.5		177.0
Total property, plant, and equipment, gross	3,965.5		3,710.0
Accumulated depreciation	(2,387.1)		(2,208.4)
Total property, plant, and equipment, net	$	1,578.4	$	1,501.6

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7. GOODWILL AND INTANGIBLE ASSETS

There were no changes to the carrying amount of goodwill during the three and six months ended April 1, 2022.

The Company tests its goodwill for impairment annually as of the first day of its fourth fiscal quarter and in interim periods if certain events occur indicating the carrying value of goodwill may be impaired. There were no indicators of impairment noted during the three and six months ended April 1, 2022.

Intangible assets consist of the following (in millions):


		As of						As of
	Weighted Average Amortization Period (Years)	April 1, 2022						October 1, 2021
		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Customer relationships and backlog	2.3	154.6		(79.0)		75.6		174.3		(44.0)		130.3
Developed technology and other	4.1	1,154.6		(120.9)		1,033.7		1,036.9		(88.0)		948.9
Technology licenses	2.6	61.4		(32.7)		28.7		48.4		(23.9)		24.5
In-process research and development		427.7		—		427.7		594.9		—		594.9
Total intangible assets		$	1,798.3	$	(232.6)	$	1,565.7	$	1,854.5	$	(155.9)	$	1,698.6

Fully amortized intangible assets are eliminated from both the gross and accumulated amortization amounts in the first quarter of each fiscal year. During the three and six months ended April 1, 2022, $167.2 million of in-process research and development (“IPR&D”) assets were transferred to definite-lived intangible assets, and are being amortized over their weighted-average useful lives of 6.6 years. Amortization expense related to definite-lived intangible assets was $65.9 million and $145.9 million for the three and six months ended April 1, 2022, respectively. Amortization expense related to definite-lived intangible assets was $9.5 million and $17.5 million for the three and six months ended April 2, 2021, respectively.

Annual amortization expense for the next five fiscal years related to definite-lived intangible assets, excluding IPR&D, is expected to be as follows (in millions):


	Remaining 2022		2023		2024		2025		2026		Thereafter


Amortization expense	$	130.7	$	198.2	$	150.7	$	133.4	$	119.8	$	405.2

8. INCOME TAXES

The provision for income taxes consists of the following components (in millions):


	Three Months Ended						Six Months Ended
	April 1, 2022			April 2, 2021			April 1, 2022			April 2, 2021
United States income taxes	34.3			36.4			52.7			77.4
Foreign income taxes	14.0			14.1			31.9			34.6
Provision for income taxes	$	48.3		$	50.5		$	84.6		$	112.0

Effective tax rate	13.7		%	13.4		%	10.7		%	11.8		%

The difference between the Company’s effective tax rate and the 21.0% United States federal statutory rate for the three and six months ended April 1, 2022, and April 2, 2021, respectively, resulted primarily from foreign earnings taxed at rates lower than the federal statutory rate, a benefit from foreign-derived intangible income deduction (“FDII”), windfall tax deductions, and research and experimentation and foreign tax credits earned, partially offset by a tax on global intangible low-taxed income (“GILTI”), and tax expense related to a change in the reserve for uncertain tax positions.

9. COMMITMENTS AND CONTINGENCIES

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Legal Matters

From time to time, various lawsuits, claims, and proceedings have been, and may in the future be, instituted or asserted against the Company, including those pertaining to patent infringement, intellectual property, environmental hazards, product liability and warranty, safety and health, employment, and contractual matters.

The semiconductor industry is characterized by vigorous protection and pursuit of intellectual property rights. From time to time, third parties have asserted and may in the future assert patent, copyright, trademark, and other intellectual property rights to technologies that are important to the Company’s business and have demanded and may in the future demand that the Company license their technology. The outcome of any such litigation cannot be predicted with certainty and some such lawsuits, claims, or proceedings may be disposed of unfavorably to the Company. Generally speaking, intellectual property disputes often have a risk of injunctive relief, which, if imposed against the Company, could materially and adversely affect the Company’s financial condition or results of operations. From time to time the Company may also be involved in legal proceedings in the ordinary course of business.

The Company monitors the status of legal proceedings and other contingencies on an ongoing basis to ensure loss contingencies are recognized and/or disclosed in its financial statements and footnotes. The Company does not believe there are any pending legal proceedings that are reasonably possible to result in a material loss. The Company is engaged in various legal actions in the normal course of business and, while there can be no assurances, the Company believes the outcome of all pending litigation involving the Company will not have, individually or in the aggregate, a material adverse effect on its business or financial statements.

Guarantees and Indemnities

The Company has made no significant contractual guarantees for the benefit of third parties. However, the Company generally indemnifies its customers from third-party intellectual property infringement litigation claims related to its products and, on occasion, also provides other indemnities related to product sales. In connection with certain facility leases, the Company has indemnified its lessors for certain claims arising from the facility or the lease.

The Company indemnifies its directors and officers to the maximum extent permitted under the laws of the state of Delaware. The duration of the indemnities varies and in many cases is indefinite. The indemnities to customers in connection with product sales generally are subject to limits based upon the amount of the related product sales and in many cases are subject to geographic and other restrictions. In certain instances, the Company’s indemnities do not provide for any limitation of the maximum potential future payments the Company could be obligated to make. The Company has not recorded any liability for these indemnities in the accompanying consolidated balance sheets and does not expect that such obligations will have a material adverse impact on its financial statements.

10. STOCKHOLDERS’ EQUITY

Stock Repurchase

On January 26, 2021, the Board of Directors approved a stock repurchase program, pursuant to which the Company is authorized to repurchase up to $2.0 billion of its common stock from time to time prior to January 26, 2023, on the open market or in privately negotiated transactions, as permitted by securities laws and other legal requirements. This authorized stock repurchase program replaced in its entirety the January 30, 2019, stock repurchase program. The timing and amount of any shares of the Company’s common stock that are repurchased under the repurchase program are determined by the Company’s management based on its evaluation of market conditions and other factors.

During the three months ended April 1, 2022, the Company paid $418.0 million (including commissions) in connection with the repurchase of 3.0 million shares of its common stock (paying an average price of $138.46 per share). During the six months ended April 1, 2022, the Company paid $687.4 million (including commissions) in connection with the repurchase of 4.7 million shares of its common stock (paying an average price of $146.03 per share), all of which shares were repurchased pursuant to the January 26, 2021, stock repurchase program. As of April 1, 2022, $1.3 billion remained available under the January 26, 2021, stock repurchase program.

During the three months ended April 2, 2021, the Company did not repurchase any shares of its common stock. During the six months ended April 2, 2021, the Company paid $195.6 million (including commissions) in connection with the repurchase of 1.4 million shares of its common stock (paying an average price of $138.85 per share), all of which shares were repurchased pursuant to the January 30, 2019, stock repurchase program.

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Dividends

On May 3, 2022, the Company announced that the Board of Directors had declared a cash dividend on the Company’s common stock of $0.56 per share. This dividend is payable on June 14, 2022, to the Company’s stockholders of record as of the close of business on May 24, 2022.

Dividends charged to retained earnings were as follows (in millions, except per share data):


	2022				2021
	Per Share		Total Amount		Per Share		Total Amount
First quarter	$	0.56	$	92.5	$	0.50	$	83.0
Second quarter	0.56		91.2		0.50		82.6

Total dividends	$	1.12	$	183.7	$	1.00	$	165.6

Share-based Compensation

The following table summarizes the share-based compensation expense by line item in the Consolidated Statements of Operations (in millions):


	Three Months Ended				Six Months Ended
	April 1, 2022		April 2, 2021		April 1, 2022		April 2, 2021
Cost of goods sold	$	6.3	$	12.7	$	14.9	$	19.1
Research and development	27.3		24.0		50.2		44.3
Selling, general, and administrative	22.1		19.7		41.0		37.4
Total share-based compensation	$	55.7	$	56.4	$	106.1	$	100.8

11. EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted earnings per share (in millions, except per share amounts):


	Three Months Ended				Six Months Ended
	April 1, 2022		April 2, 2021		April 1, 2022		April 2, 2021
Net income	$	305.8	$	325.0	$	705.7	$	834.3

Weighted average shares outstanding – basic	163.7		165.0		164.4		165.2
Dilutive effect of equity-based awards	0.7		1.8		1.0		1.7
Weighted average shares outstanding – diluted	164.4		166.8		165.4		166.9

Net income per share – basic	$	1.87	$	1.97	$	4.29	$	5.05
Net income per share – diluted	$	1.86	$	1.95	$	4.27	$	5.00

Anti-dilutive common stock equivalents	0.9		—		0.6		—

Basic earnings per share are calculated by dividing net income by the weighted average number of shares of the Company’s common stock outstanding during the period. The calculation of diluted earnings per share includes the dilutive effect of equity-based awards that were outstanding during the three and six months ended April 1, 2022, and April 2, 2021, using the treasury stock method. Shares issuable upon the vesting of performance stock awards are likewise included in the calculation of diluted earnings per share as of the date the condition(s) have been satisfied, assuming the end of the reporting period was the end of the contingency period. Certain of the Company’s outstanding share-based awards, noted in the table above, were excluded because they were anti-dilutive, but they could become dilutive in the future.

12. SUPPLEMENTAL FINANCIAL INFORMATION

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Other current liabilities consist of the following (in millions):


	As of
	April 1, 2022		October 1, 2021
Accrued taxes	$	64.3	$	88.6
Short-term operating lease liabilities	19.2		33.0
Accrued customer liabilities	151.2		119.7
Other	43.7		45.9
Total other current liabilities	$	278.4	$	287.2

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

This report and other documents we have filed with the SEC contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), and are subject to the “safe harbor” created by those sections. Words such as “anticipates,” “believes,” “continue,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “seek,” “should,” “will,” “would,” and similar expressions or variations or negatives of such words are intended to identify forward-looking statements but are not the exclusive means of identifying forward-looking statements in this report. Additionally, statements concerning future matters such as the possible impacts of geopolitical conflicts, inflation, and the COVID-19 pandemic, as well as the development of new products, enhancements of technologies, sales levels, expense levels, the benefits of acquisitions we have made or may make in the future, and other statements regarding matters that are not historical are forward-looking statements. Although forward-looking statements in this report reflect the good faith judgment of our management as of the date the statement is first made, such statements can only be based on facts and factors then known by us. Consequently, forward-looking statements involve inherent risks and uncertainties, and actual results and outcomes may differ materially and adversely from the results and outcomes discussed in, or anticipated by, the forward-looking statements. A number of important factors could cause actual results to differ materially and adversely from those in the forward-looking statements. We urge you to consider the risks and uncertainties discussed in this Quarterly Report on Form 10-Q and the 2021 10-K, under the heading “Risk Factors” and in the other documents we have filed with the SEC in evaluating our forward-looking statements. We have no plans, and undertake no obligation, to revise or update our forward-looking statements to reflect any event or circumstance that may arise after the date of the initial filing of this Quarterly Report on Form 10-Q. We caution readers not to place undue reliance upon any such forward-looking statements.

In this document, the words “we,” “our,” “ours,” and “us” refer only to Skyworks Solutions, Inc., and its subsidiaries and not any other person or entity.

Impact of COVID-19

The COVID-19 pandemic and the resulting economic downturn are affecting business conditions in our industry. The duration, severity, and future impact of the pandemic, including as a result of more contagious variants of the virus that causes COVID-19, continue to be highly uncertain and could still result in significant disruptions to our business operations, as well as negative impacts to our financial condition. Like many companies in the semiconductor industry, we are experiencing various supply constraints due to the pandemic. While we are working with our global supply chain partners to mitigate this risk, the duration and extent of the supply chain disruptions remain uncertain.

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RESULTS OF OPERATIONS

Three and Six Months Ended April 1, 2022, and April 2, 2021

The following table sets forth the results of our operations expressed as a percentage of net revenue:


	Three Months Ended				Six Months Ended
	April 1, 2022		April 2, 2021		April 1, 2022		April 2, 2021
Net revenue	100.0	%	100.0	%	100.0	%	100.0	%
Cost of goods sold	52.3		50.6		52.5		50.0
Gross profit	47.7		49.4		47.5		50.0
Operating expenses:
Research and development	12.0		11.2		11.0		9.4
Selling, general, and administrative	6.2		6.0		5.8		5.1
Amortization of intangibles	1.6		0.2		1.9		0.2
Restructuring, impairment, and other charges	0.4		—		0.2		—
Total operating expenses	20.2		17.4		18.9		14.7
Operating income	27.5		32.0		28.6		35.3
Interest expense	(0.9)		—		(0.8)		—
Other income (expense), net	(0.1)		—		—		—
Income before income taxes	26.5		32.0		27.8		35.3
Provision for income taxes	3.6		4.3		3.0		4.2
Net income	22.9	%	27.7	%	24.8	%	31.1	%

OVERVIEW

We, together with our consolidated subsidiaries, are empowering the wireless networking revolution. Our highly innovative analog semiconductors are connecting people, places, and things spanning a number of new and previously unimagined applications within the aerospace, automotive, broadband, cellular infrastructure, connected home, entertainment and gaming, industrial, medical, military, smartphone, tablet, and wearable markets.

General

During the three months ended April 1, 2022, the following key factors contributed to our overall results of operations, financial position, and cash flows:

•Net revenue increased to $1,335.6 million for the three months ended April 1, 2022, as compared to $1,171.8 million for the corresponding period in fiscal 2021, driven primarily by our prior year fourth quarter acquisition to support high-growth market segments, including electric and hybrid vehicles, industrial and motor control, power supply, 5G wireless infrastructure, optical data communication and data center, automotive, and smart home. The increase in net revenue was also driven in part by an increase in demand for next-generation wireless connectivity products, including 5G and advanced Wi-Fi solutions, from major OEMs and the associated increases in average content per device for these products, partially offset by a decrease in demand for our mobile products from smartphone customers in China.

•Our ending cash, cash equivalents, and marketable securities balance decreased to $778.2 million. The decrease in cash, cash equivalents, and marketable securities during the three months ended April 1, 2022, was primarily due to the repurchase of 3.0 million shares of common stock for $418.0 million, capital expenditures of $126.7 million, and dividend payments of $91.2 million, partially offset by cash generated from operations of $392.9 million.

Net Revenue

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	Three Months Ended					Six Months Ended
	April 1, 2022		Change	April 2, 2021		April 1, 2022		Change	April 2, 2021
(dollars in millions)
Net revenue	$	1,335.6	14.0%	$	1,171.8	$	2,846.0	6.1%	$	2,681.8

We market and sell our products directly to OEMs of communications and electronics products, third-party original design manufacturers and contract manufacturers, and indirectly through electronic components distributors. We generally experience seasonal peaks during our fourth and first fiscal quarters (which correspond to the second half of the calendar year), primarily as a result of increased worldwide production of consumer electronics in anticipation of increased holiday sales, whereas our second and third fiscal quarters are typically lower and in line with seasonal industry trends.

The increase in net revenue for the three and six months ended April 1, 2022, as compared with the corresponding periods in fiscal 2021, was driven primarily by our prior year fourth quarter acquisition to support high-growth market segments, including electric and hybrid vehicles, industrial and motor control, power supply, 5G wireless infrastructure, optical data communication and data center, automotive, and smart home. The increase in net revenue was also driven in part by an increase in demand for next-generation wireless connectivity products, including 5G and advanced Wi-Fi solutions, from major OEMs and the associated increases in average content per device for these products, partially offset by a decrease in demand for our mobile products from smartphone customers in China.

Gross Profit


	Three Months Ended							Six Months Ended
	April 1, 2022			Change	April 2, 2021			April 1, 2022			Change	April 2, 2021
(dollars in millions)
Gross profit	$	637.6		10.2%	$	578.4		$	1,352.4		0.9%	$	1,340.1
% of net revenue	47.7		%		49.4		%	47.5		%		50.0		%

Gross profit represents net revenue less cost of goods sold. Our cost of goods sold consists primarily of purchased materials, labor, and overhead (including depreciation, share-based compensation, and amortization of acquisition intangibles, including inventory step-up expense) associated with product manufacturing. As part of our normal course of business, we intend to improve gross profit with efforts to increase unit volumes, improve manufacturing efficiencies, lower manufacturing costs of existing products, and by introducing new and higher value-added products.

The increase in gross profit for the three and six months ended April 1, 2022, as compared with the corresponding periods in fiscal 2021, was primarily the result of a favorable product mix including volume increases for new product introductions with a gross profit impact of $110.9 million and $220.7 million, respectively, partially offset by lower comparable unit volumes and an increase in amortization of acquisition intangibles, including inventory step-up, due to additional intangible assets acquired during the fourth quarter of fiscal 2021.

Research and Development


	Three Months Ended								Six Months Ended
	April 1, 2022			Change		April 2, 2021			April 1, 2022			Change		April 2, 2021
(dollars in millions)
Research and development	$	160.7		23.0	%	$	130.7		$	311.9		23.6	%	$	252.3
% of net revenue	12.0		%			11.2		%	11.0		%			9.4		%

Research and development expenses consist primarily of direct personnel costs including share-based compensation expense, costs for pre-production evaluation, and testing of new devices, masks, engineering prototypes, and design tool costs.

The increase in research and development expenses for the three and six months ended April 1, 2022, as compared with the corresponding periods in fiscal 2021, was primarily related to headcount-related expenses, including share-based compensation, as a result of our increased investment in developing new technologies and products. The increase in headcount was partially due to our acquisition in the fourth quarter of fiscal 2021.

Selling, General, and Administrative

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	Three Months Ended								Six Months Ended
	April 1, 2022			Change		April 2, 2021			April 1, 2022			Change		April 2, 2021
(dollars in millions)
Selling, general, and administrative	$	83.0		18.1	%	$	70.2		$	165.1		20.6	%	$	136.9
% of net revenue	6.2		%			6.0		%	5.8		%			5.1		%

Selling, general, and administrative expenses include legal and related costs, accounting, treasury, human resources, information systems, customer service, bad debt expense, sales commissions, share-based compensation expense, advertising, marketing, costs associated with business combinations completed or contemplated during the period, and other costs.

The increase in selling, general, and administrative expenses for the three and six months ended April 1, 2022, as compared with the corresponding periods in fiscal 2021, was primarily related to increases in headcount-related expenses, including share-based compensation. The increase in headcount was primarily due to our acquisition in the fourth quarter of fiscal 2021.

Amortization of Intangibles


	Three Months Ended								Six Months Ended
	April 1, 2022			Change		April 2, 2021			April 1, 2022			Change		April 2, 2021
(dollars in millions)
Amortization of intangibles	$	21.9		682.7	%	$	2.8		$	55.2		903.6	%	$	5.5
% of net revenue	1.6		%			0.2		%	1.9		%			0.2		%

The increase in amortization expense for the three and six months ended April 1, 2022, as compared with the corresponding periods in fiscal 2021, was primarily due to the intangible assets acquired during the fourth quarter of fiscal 2021.

Interest Expense


	Three Months Ended								Six Months Ended
	April 1, 2022			Change		April 2, 2021			April 1, 2022			Change		April 2, 2021
(dollars in millions)
Interest expense	$	(11.4)		100.0	%	$	—		$	(22.3)		100.0	%	$	—
% of net revenue	(0.9)		%			—		%	(0.8)		%			—		%

The increase in interest expense for the three and six months ended April 1, 2022, as compared with the corresponding periods in fiscal 2021, was due to the issuance of the Notes (as defined below) in May 2021 and the borrowing of the Term Loans (as defined below) in July 2021.

Provision for Income Taxes


	Three Months Ended								Six Months Ended
	April 1, 2022			Change		April 2, 2021			April 1, 2022			Change		April 2, 2021
(dollars in millions)
Provision for income taxes	$	48.3		(4.4)	%	$	50.5		$	84.6		(24.5)	%	$	112.0
% of net revenue	3.6		%			4.3		%	3.0		%			4.2		%

We recorded a provision for income taxes of $48.3 million (which consisted of $34.3 million and $14.0 million related to United States and foreign income taxes, respectively) and $84.6 million (which consisted of $52.7 million and $31.9 million related to United States and foreign income taxes, respectively) for the three and six months ended April 1, 2022, respectively.

The decrease in income tax expense for the three and six months ended April 1, 2022, as compared with the corresponding periods in fiscal 2021, was primarily due to a decrease in income from operations and an increase in windfall tax deductions.

LIQUIDITY AND CAPITAL RESOURCES

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	Six Months Ended
(in millions)	April 1, 2022		April 2, 2021
Cash and cash equivalents at beginning of period	$	882.9	$	566.7
Net cash provided by operating activities	974.5		1,100.8
Net cash used in investing activities	(214.4)		(214.9)
Net cash used in financing activities	(986.6)		(392.7)
Cash and cash equivalents at end of period	$	656.4	$	1,059.9

Cash provided by operating activities:

Cash provided by operating activities consists of net income for the period adjusted for certain non-cash items and changes in certain operating assets and liabilities. The $126.3 million decrease in cash provided by operating activities during the six months ended April 1, 2022, as compared with the corresponding period in fiscal 2021, was primarily related to unfavorable changes in working capital of $186.6 million, due primarily to changes in inventory and increases in cash deposits with suppliers and customers.

Cash used in investing activities:

Cash used in investing activities consists primarily of capital expenditures and cash paid related to the purchase of marketable securities, offset by cash received related to the sale or maturity of marketable securities. The $0.5 million decrease in cash used in investing activities during the six months ended April 1, 2022, as compared with the corresponding period in fiscal 2021, was primarily related to a $37.3 million decrease in cash used for capital expenditures, partially offset by a $28.7 million decrease in the net sales of marketable securities.

Cash used in financing activities:

Cash used in financing activities consists primarily of proceeds and payments related to our long-term borrowings and cash transactions related to equity. The $593.9 million increase in cash used in financing activities during the six months ended April 1, 2022, as compared with the corresponding period in fiscal 2021, was primarily related to an increase of $491.8 million in stock repurchase activity, a $50.0 million repayment of Term Loans, an increase of $32.3 million related to the minimum statutory payroll tax withholdings upon vesting of employee performance and restricted stock awards, and an increase of $18.1 million in dividend payments.

Liquidity:

Cash, cash equivalents, and marketable securities totaled $778.2 million as of April 1, 2022, representing a decrease of $249.0 million from October 1, 2021. The decrease during the six months ended April 1, 2022, resulted primarily from the repurchase of 4.7 million shares of common stock for $687.4 million, capital expenditures of $222.5 million, and dividend payments of $183.7 million, partially offset by cash generated from operations of $974.5 million.

We have outstanding $500.0 million of Notes Due 2023, $500.0 million of Notes Due 2026, and $500.0 million of Notes Due 2031 (the “Notes”). We have a term credit agreement (the “Term Credit Agreement”) providing for a $1.0 billion term loan facility (the “Term Loan Facility”). On July 26, 2021, the Company borrowed $1.0 billion in aggregate principal amount of term loans (the “Term Loans”) under the Term Loan Facility to finance a portion of the purchase price for the Infrastructure and Automotive business of Silicon Laboratories Inc. and to pay fees and expenses incurred in connection therewith. During the six months ended April 1, 2022, we repaid $50.0 million of outstanding borrowings under the Term Loans. As of April 1, 2022, there were $700.0 million of borrowings outstanding under the Term Credit Agreement. We have a Revolving Credit Agreement (the “Revolving Credit Agreement”) under which we may borrow up to $750.0 million for general corporate purposes and working capital needs of the Company and its subsidiaries. As of April 1, 2022, there were no borrowings outstanding under the revolving credit facility (the “Revolver”). The Revolving Credit Agreement expires July 26, 2026.

Based on our historical results of operations, we expect that our cash, cash equivalents, and marketable securities on hand, the cash we expect to generate from operations, and funds from our Revolver, will be sufficient to fund our short-term and long-term liquidity requirements primarily arising from: research and development, capital expenditures, potential acquisitions, working capital, quarterly cash dividend payments (if such dividends are declared by the Board of Directors), outstanding commitments, and other liquidity requirements associated with existing operations. However, we cannot be certain that our cash on hand, cash generated from operations, and funds from our Revolver will be available in the future to fund all of our capital and operating requirements. In addition, any future strategic investments and significant acquisitions may require additional cash and capital

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resources. If we are unable to obtain sufficient cash or capital to meet our needs on a timely basis and on favorable terms, our business and operations could be materially and adversely affected.

Our invested cash balances primarily consist of highly liquid marketable securities that are available to meet near-term cash requirements including: term deposits, certificates of deposit, money market funds, U.S. Treasury securities, agency securities, corporate debt securities, and commercial paper.

Our contractual obligations disclosure in the 2021 10-K has not materially changed since we filed that report.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

We are subject to overall financial market risks, such as changes in market liquidity, credit quality, investment risk, interest rate risk, and foreign exchange rate risk as described below.

Investment and Interest Rate Risk

Our exposure to interest rate and general market risks relates to our Term Credit Facility, which has variable interest rates, and our investment portfolio. As of April 1, 2022, there were $700.0 million of borrowings outstanding under the Term Credit Agreement and a potential change in the associated interest rates would be immaterial to the results of our operations. Our investment portfolio consists of cash and cash equivalents (money market funds and marketable securities purchased with less than ninety days until maturity) that total approximately $656.4 million, and marketable securities (U.S. Treasury and government securities, corporate bonds and notes, and municipal bonds) that total approximately $118.4 million and $3.4 million within short-term and long-term marketable securities, respectively, as of April 1, 2022.

The main objectives of our investment activities are liquidity and preservation of capital. Our cash equivalent investments have short-term maturity periods that dampen the impact of market or interest rate risk. Our marketable securities consist of short-term and long-term maturity periods between 90 days and two years. Credit risk associated with our investments is not material because our investments are diversified across several types of securities with high credit ratings, which reduces the amount of credit exposure to any one investment.

Based on our results of operations for the three and six months ended April 1, 2022, a hypothetical reduction in the interest rates on our cash, cash equivalents, and other investments to zero would result in an immaterial reduction of interest income with a de minimis impact on income before taxes.

Given the low interest rate environment, the objectives of our investment activities, and the relatively low interest income generated from our cash, cash equivalents, and other investments, we do not believe that investment or interest rate risks currently pose material exposures to our business or results of operations.

Foreign Exchange Rate Risk

Substantially all sales to customers and arrangements with third-party manufacturers provide for pricing and payment in United States dollars, thereby reducing the impact of foreign exchange rate fluctuations on our results. A percentage of our international operational expenses are denominated in foreign currencies, and exchange rate volatility could positively or negatively impact those operating costs. Increases in the value of the United States dollar relative to other currencies could make our products more expensive, which could negatively impact our ability to compete. Conversely, decreases in the value of the United States dollar relative to other currencies could result in our suppliers raising their prices to continue doing business with us. Given the relatively small number of customers and arrangements with third-party manufacturers denominated in foreign currencies, we do not believe that foreign exchange volatility has a material impact on our current business or results of operations. However, fluctuations in currency exchange rates could have a greater effect on our business or results of operations in the future to the extent our expenses increasingly become denominated in foreign currencies.

We may enter into foreign currency forward and options contracts with financial institutions to protect against foreign exchange risks associated with certain existing assets and liabilities, certain firmly committed transactions, forecasted future cash flows, and net investments in foreign subsidiaries. However, we may choose not to hedge certain foreign exchange exposures for a variety of reasons, including, but not limited to, accounting considerations and the prohibitive economic cost of hedging particular exposures. For the three and six months ended April 1, 2022, we had no outstanding foreign currency forward or options contracts with financial institutions.

ITEM 4. CONTROLS AND PROCEDURES.

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Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures as of April 1, 2022. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well-designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on management’s evaluation of our disclosure controls and procedures as of April 1, 2022, our chief executive officer and chief financial officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control Over Financial Reporting

There are no changes to our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that occurred during the second quarter of fiscal 2022 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

Refer to Note 9 of the Notes to Consolidated Financial Statements for a detailed discussion.

ITEM 1A. RISK FACTORS.

In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the factors discussed in Part I, Item 1A Risk Factors in the 2021 10-K, which could materially affect our business, financial condition, or future results.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

The following table provides information regarding repurchases of common stock made during the three months ended April 1, 2022:


Period	Total Number of Shares Purchased		Average Price Paid per Share	Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1)
01/01/22 - 01/28/22	500,000		$156.10	500,000	$1.7 billion
01/29/22 - 02/25/22	1,895,428	(2)	$137.12	1,887,996	$1.4 billion
02/26/22 - 04/01/22	649,644	(3)	$128.63	631,142	$1.3 billion
Total	3,045,072			3,019,138

(1) The stock repurchase program approved by the Board of Directors on January 26, 2021, authorizes the repurchase of up to $2.0 billion of our common stock from time to time on the open market or in privately negotiated transactions as permitted by securities laws and other legal requirements, and is scheduled to expire on January 26, 2023.

(2) 1,887,996 shares were repurchased at an average price of $137.11 per share as part of our stock repurchase program, and 7,432 shares were repurchased by us at the fair market value of the common stock as of the applicable purchase date, in connection with the satisfaction of tax withholding obligations under equity award agreements with an average price of $139.59 per share.

(3) 631,142 shares were repurchased at an average price of $128.50 per share as part of our stock repurchase program, and 18,502 shares were repurchased by us at the fair market value of the common stock as of the applicable purchase date, in connection with the satisfaction of tax withholding obligations under equity award agreements with an average price of $133.05 per share.

Table of Contents

ITEM 6. EXHIBITS.

Exhibit

Number

Exhibit Description

Form

Incorporated by Reference

Filed Herewith

File No.

Exhibit

Filing Date

10.1*

Skyworks Solutions, Inc. Amended and Restated 2008 Director Long-Term Incentive Plan, as Amended

10.2*

Skyworks Solutions, Inc. Cash Compensation Plan for Directors

10.3*

Change in Control / Severance Agreement, dated November 9, 2016, between the Company and Reza Kasnavi

31.1

Certification of the Company’s Chief Executive Officer pursuant to Securities Exchange Act of 1934, as amended, Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2

Certification of the Company’s Chief Financial Officer pursuant to Securities Exchange Act of 1934, as amended, Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1

Certification of the Company’s Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2

Certification of the Company’s Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS

Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH

Inline XBRL Taxonomy Extension Schema Document

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document

104

Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101)

* Indicates a management contract or compensatory plan or arrangement.

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



		SKYWORKS SOLUTIONS, INC.

Date:	May 3, 2022	By:	/s/ Liam K. Griffin
			Liam K. Griffin
			Chairman, Chief Executive Officer and President
			(Principal Executive Officer)

		By:	/s/ Kris Sennesael
			Kris Sennesael
			Senior Vice President and Chief Financial Officer
			(Principal Accounting and Financial Officer)

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Skyworks Solutions (SWKS) 10-Q2022 Q2 Quarterly report

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