QUALCOMM (QCOM) 4 Feb 212021 Q1 Earnings call transcript

Ladies and gentlemen, thank you for standing by. Welcome to the Qualcomm First Quarter and Fiscal 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded February 3rd, 2021. today's XXX-XXX-XXXX. for number playback call is The International dial XXX-XXX-XXXX. callers please number The is reservation XXXXXXXX. playback now the I Mauricio to like would turn President Investor Lopez-Hodoyan, call of Relations. Vice to over Mr. Lopez-Hodoyan. Please go ahead.

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

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

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

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

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

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

requirements been Thank QCT, earnings and been great had revenues Notably, stronger that not strength XG with a year-over-year $X.X supply strong more first also of with XX% you, to XXXX non-GAAP our everyone. pace billion afternoon a accelerating portfolio. of combined saw the it's simultaneous QCT year-over-year up quarter and across would we billion, of constrained. technical and a outlook our up than of industry change that of sequentially. non-GAAP XX% the prior start Within $X.XX have performance revenues record, from $X.X per and adoption record plays multi-year we doubling even drives our to strength. off significant transition record Mauricio XX% and increasingly The global is good a Fiscal share, complex year. were

crossing and quarterly threshold, significant revenues the growth milestone. a year-over-year more Our than doubling demonstrated with continued $X RF adjacency billion

challenges executing smartphones. a higher to modem-to-antenna We experience in technical XG of delivering our in of the of a are strategy true content capture well extremely dollar share address many and

are across to to for our the a smartphones wins growth pipeline and ecosystem, bring strong further with roadmap adjacent in RF also We mobile a industries. well-positioned design handset expertise

automotive achieve from win target up Our just million has revenues $XXX were of on year-over-year years XX% us our our of XXXX three year ago, billion $X.X fiscal to revenue trajectory and $X.X placing to billion $X a design grown pipeline billion.

our XX% billion IoT driven threshold Our by year-over-year, $X industrial and grew the digitization and in consumer, growth for also passed the adjacency QX applications. the of of core networking, technologies

well the of execute constraints Our team pandemic. and in to continues the of extremely supply continued spite impact

agreements, up and of handset unmatched Our in the our license adjacencies. to license system-level foundational deployment portfolio core last strategy is as valuable our out as by more innovations well rapid from XG, broad us across is with in we properties well XXX in implementation the patents having In and than XXX capture licensing quarter. creating as signed part XG, XG, and of industry, along both positioning playing expected, largely recognized XG intellectual XG agreements new opportunities business,

progress with industry. our outside XG the verticals, continues XG the to This successive coupled XG innovations, implement continues development rapidly developing seamlessly the in of and technology in products necessary technologies leadership deployment our the the in to success implement industry foundational under to ability handset coupled XG enabling worldwide. our in foundational implement enabling standards reflects continued coordinated currently in process releases new of Our and licensing developing themselves; leadership development XG in through leadership standards as products with to drive

will widely enable businesses more connected both urban benefit the to industries, of advanced complementary continue future. in in objectives variety as social including and cases well and a that will environments, in the agriculture that consumers as important invest of and a and use rural technologies We improvements adoption education of healthcare XG in

We in the resulting to AI industries centers. technology automotive have deep research the past make and necessary in IoT decade and products AI spent from AI also and the the creation to development, smartphones help To making of and AI available scale tools ubiquitous, and OEMs. will across the efficient our believe transform around technologies we software commercialization focused advancements, scale industries AI ubiquitous and of We globe. developers AI, and will on hardware, accelerate to the data and making algorithmic

of in era. ecosystem was of our to reflected new deliver acquisition our products the look computing technology to and customers processor drive design commitment experiences team forward for NUVIA's world-class Snapdragon our proposed recently redefine We and to CPU a innovation, XG announced high-performance performance, NUVIA. enable of and class Our roadmap with combining to

to is years, one the roadmap In largest as multiple RF ago, today ecosystem position and our In of the offer. we leading-edge demonstrated the the emerged suppliers our result our we years platform for of of demos world's we RF nodes executing a our process handset a just in mobile smartphone designs, real performance products we platforms. more flagship portfolio solutions, with consumer first announced front-end XG of Today, mobile demand millimeter in on adjacencies. across expanding the Snapdragon long-term XG RF, extend breadth XG bands, space to have and sub-X high few the XG automotive our industry supporting leadership growing are an our and and multi-gigabit supporting XG The with expand us becoming differentiated applications. tiers to autonomous, product wave solutions continues two over more address XG we rapidly With Just addition electric. enabling change of across end-to-end networks car connected, basebands, well-positioned the XXX to advanced more devices. is XG XG platform, commercial first live end-to-end have our RF and millimeter strategy and experiences to and Snapdragon in bands, the

new the disrupt and navigation, real-time new are demands, connectivity trends experiences cabins as infotainment, these such and becoming user XG standard. industry, digital entertainment always-connected for the and As

to we each demands increasing on connect designed platforms experiences the safe positioning the XG over and today and of XG other, securely meet are integrated XG driving leader to connected vehicles a the surrounding road by premium working and cellular vehicles technologies, million modems, the With precise cloud, services. and are to automotive environment. our LTE in Bluetooth with XG We and With our XXX connected WiFi, telematics. VXX, are powered

in incumbency auto the evolving are position building automotive We telematics continued strong industry innovation a with as rapid industry transformation. partner our strategic to undergoes

selected cockpit fourth-generation automotive XX and automakers our compute, third-generation have platform and leadership demonstrates artificial of high-performance our announced top-XX vision, recently multi-sensor the by computer been Our processing. intelligence, automotive solutions in

General automotive strategic engagements including Electronics, industry. Motors X Google, and leading announced strong LG Lastly, alignment Tier and Visteon Panasonic, with our suppliers of our recently evidence the are with further

drive Windows we Turning platforms in continued the IoT, launch of Chrome and ecosystem of Xcx, to continue commercial Snapdragon and to progress. momentum for with educational second-generation our introduction and both compute our the

potential and We driving global are We also partnerships. computing over platform. ecosystem XR has wins XR with next operator believe industry XX be the to the strong leadership with momentum in design

X enterprise, Wi-Fi and networks networking potential protocols, Our and of in of prosumer full targeting venue, the a advanced with deployed solutions target blend applications. technologies

We spectrum X-gigahertz our with second-generation profile extending platforms. Wi-Fi are the also advanced feature into X

future. outdoor in the small and XG private America with Japan solution, to on private transformation capitalizing networks public launches in consumers, indoor the reliability enabling enterprise networks, are North millimeter-wave of bringing providing and and cell as for well We higher as speeds and our connectivity

Qualcomm transportation, accelerating last and we several years Lastly, our Cristiano exciting carry executes in technologies are the on a that non-mobile have in great and the to is over to vision like innovating to position applications. strong over Akash. are what to core relentless many for me call many foundation I retail, we large been would a when for Qualcomm's vision. commitment manufacturing is is front years. expected gave It of a hard obvious on of always to this wasn't This for industries The succeed confidence the shares with and ago the solve. confidence out he the strategy an turn see years seven honor. laid leadership forward now the privilege of challenges to largely technical very CEO and focusing across products, deployment digitization utilities, with playing as Being we every us of opportunities placing would industries even Qualcomm I as out the of has it Cristiano

Steve afternoon Thank and everyone. you, good

of margins XX% assumption XXX% in strength X% results strong year-over-year planning and a and and COVID QTL, we reflecting revenues $X.X beginning results X% to of December we reduction, driven above and the which year. report quarter, front-end, the compared guidance reduction global EPS we reflect increases XG, strong the fiscal a These handset of to XG, the record our respectively, In results and year-over-year pleased driven softness with and $X.XX by of results year-over-year. extremely XX% RF shipments. up delivered revenues XX% In In domestic strength to of and record with $X.X quarter was automotive, QCT, the These of China and XG XX%. the start in of year-over-year $X.XX, of across of saw we across non-GAAP quarter. of non-GAAP are first XX% up We end billion, billion at high of revenues our by sequentially EBT We shipments impact EPS, IoT. handsets, in QTL QCT. the recorded provided revenues were billion, a delivered

which guidance realized basis leverage. XXX of margins increased was our Our strong end operating EBT and the as XX%, revenue growth points high of the of benefit sequentially drove above we

consumer, telematics applications, diversification revenues billion all front-end, record $XXX industry also XX% bands technologies. driven doubled the by automotive, of year-over-year to $X XX% our the grew RF on million for pleased year-over-year year-over-year basis, digital IoT. reflecting continued of as frequency We and and continued in customers. products rebound. broad and RF an billion across products cockpit our product IoT, $X.X networking, portfolio to a and industrial acceleration delivered our Automotive are as front-end revenues we and strength than from grew revenues our of more across demand In benefit in revenues with

non-GAAP estimate, Our due certain to primarily lower previous of $X.XX year. than and fiscal R&D the timing the was R&D within expenses our expenses combined billion of SG&A

million in XXX forecast XG approximately adoption, we to calendar in handsets XG XXX calendar to units million and XXXX XXX XXXX. estimate million Turning

and chipsets OEM partners pleased over designs our We are adoption by the across modem of XXX using extremely XG XG RF Solutions. with

mobile our XXX millimeter-wave. supporting of Our recently-announced several premium XG Snapdragon We Snapdragon tier tier our tiers, already have XXX XG from recently premium Snapdragon wins. design has capable to now all announced over XXX platform, offerings XXX, the across

XXXX, the calendar we we global a grow total rate on half, COVID XG XXXX estimate assumes XG, year-over-year impact This handsets consistent XX% with For basis to expect year-over-year. XG, In a second single-digits the declined recovery an first shipments in calendar in high and exit the half. handsets, that in of from in XXXX.

In addressable approximately include will addition, QCT's to handsets total which Huawei's existing is XXXX. share market XX% of to be in estimated expand

in R&D year-over-year historical combined EBT with Consistent dollar and XX% expenses growth reflecting trends, the X% we XXX% SG&A to XX%, to handset revenues margins $X.XX sequentially to seasonality expect In combined outlined. be $X slightly ago and we to year EBT estimate billion billion of XX% up versus XX%. to X% quarter increase up to is XX% billion revenues non-GAAP calendar quarter. quarter employee-related of billion, lower NUVIA of of of billion the previously midpoints. $X.XX second following guidance, EBT and due and estimate expenses year will our in are second to portion SG&A Turning line we of revenues by of $XXX $X holiday which acquisition resets non-GAAP In reflects forecasting fiscal I R&D quarter the costs. and XXXX estimate EPS pending a strong normal million, certain year-over-year non-GAAP for XX% with and billion QCT, of contemplated the normal our XX%, a that QTL, to the approximately margins guidance. $X.XX $X.X we forecast We of is $X.X This $X.XX, to at increase respectively and to of

earnings third to the on forward QCT we contemplates This expect to revenues double estimate second basis. a to guidance similar range forecast Looking as year-over-year be fiscal quarter, QTL a our in Year. quarter by strength of driven launches, first business, and of current holiday fiscal following which the the the was the including the in the QCT year, New half Chinese season, Apple, XG flagship and seasonality

we supply, are demand the addition, given seeing the constraints affecting In significantly industry. outpacing

in Beyond our win strong quarter, the continue third strength driven we device QCT, growth adjacent forecast by to across and platforms. launches, traction, new design

and ESG successfully I'm targets, diversity responsibility we our our and innovation, have share have across disclosed met annual yesterday, XXXX on Lastly, to exceeded latest footprint. and carbon or reducing report available website. which purposeful we and areas key our launched XXXX of corporate goals that focused is inclusion, now pleased our

respond continue of expectations our stakeholders to information to disclose in We with international alignment the to ESG standards.

want I prepared call thank hard continued work execution. now I remarks, turn to my Mauricio. Before I our finish for to back and employees the will focused their

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

Instructions] proceed Samik with with you. comes first Please from Our question [Operator Thank your Chatterjee question. JPMorgan.

Hi, taking before both to thanks and my congratulations and for Cristiano. question ask I my Steve question,

off that's more And think, in segment seasonality what to to of the causing drivers, the sell-end sell-through chips with of base is so, concerns revenues mid-teens understand that some I in is a seasonally some you inventory if you're greater mid-single-digit the for difference? leading decline a decline and to that today start the here, just And build. I I can QTL. than think just in versus us leading the help investors -- in Can guiding QCT what's

So, to I just see if that as can well. address you wanted

Samik, hi, this is Yes, Akash.

We channel. the not seeing build significant in are inventory any

clarify just that with. me maybe let start So, to

that -- think you quarter about past. talked sequentially quarter, in March to the If QCT December we've QTL consistently revenues in from seasonality about business

guidance our so reflects And that. really

that than OEMs handset different the being you the of year mix no dollar. in see the it's the kind in So, market reflected shape of and of generally

we guiding billion to came billion $X.X and March below $X.X are the below going December the we're we and is, about the just in quarter the midpoint from the just past, So, guiding similarly December in to talked in we what billion $X.X midpoint quarter. March for

just extremely our that seasonality strong the but now remove across kind Snapdragon and factor, message also different there really our -- strength is strong that's take launch but stream, in than when with that, not is Apple a March being had and we've on past significant IoT see quarter our So, you of growth auto, the the a from QCT, so of QTL. across well. chipset, with and actually with On December clearly to in platform, mobile RFFE, becoming revenue you XXX seasonality as

strength the the revenue really across what it's in of And the So, is board. the see numbers showing profile up. seasonality you

likely came even in pre not really place, though some -- it. If before that that you've think the is a change business of could can I about earnings quickly any to or of Honor material Got there part the some the see to Yes. U.S. any I restrictions to? post restructurings think changes you on there also contribution talked follow of up, Huawei Huawei I your MSM and where are historically a restructuring going had material shipments terms into you for being brand business the in change lead sold there. Do brand,

market said or we goes I it. Samik, of other opportunity we share into -- the SAM to or for Huawei Yes, as to us the share really in remarks, market an -- portion my Huawei Huawei as significant the to either OEMs growth Honor as sell have continues, see opportunity as I prepared a

longer have So, second the assumed in term, Huawei don't point, like there, significant for for kind the us, quarter we or half but Honor. a year, second of, feel material we our opportunity at that's in this revenue guidance of

you. Thank

Canaccord question. with with Genuity. Walkley Mike your from comes question next Our Please proceed

year, QCT. Steve best margins Great. wishes Cristiano Thanks. navigating just strong the my My time best question, I given front, and you to as seasonality into margin margin really some But that an leverage harvest the guess, also. to margin think strong the should on investment? XG And, focusing over about to I increased how Akash, I tough know guess, and trends on and we start times QX there's some cost.

to QCT so, the as and operating Very margins in margin the December contributing profile. and for that the really the question. extremely quarter, well Mike, at margins Yes, XX% strong strength I thanks, happy mean, in gross margins with operating were

to really when specific there Overall, perspective, driving happy Really, a profile. a are that. a from you margin isn't our forward, see very couple of trend. look margin gross So, factors there

As potential operating Analyst that out we've recent out the and have history feel in -- will falls -- on Day revenue last way something what hold we the we said so our target out. to just in have at when the profile. margins based of and to same we we the on opportunity to we're upside just pretty still we a margin like kind happy consistent But ability then ago meeting the set abstract seasonality, and view. it grow we about the past, are with our the and XX months of exceeding become you set kind And that

And XXX that lot things just you. a on high you and Thank dying legal side then with maybe XG reduce costs, audit the also on a see follow-up Do side the or still cost Thanks. QTL of if margins the down on legal you leverage the Okay. there's there? can over involved signing contracts.

Yes, Mike, level been have stable from last quarters. several legal a QTL the lower at costs perspective, a for really

And that topline on it's stabilization kind so the kind steady going licensing of and business forward. reflects margin and legal profile really the expanding the of cost focusing the about keeping and of revenue seeing you're

you. Thank

question. with your question comes Chris Raymond may Our with from line your you next Chris, James. is live; questions. Caso proceed Please your with proceed

Excuse Hi. Thank you. me.

and question, address extent some quarter. remarks, the able to weren't the the we've heard Could how quarters, business in that and that about you that the if talk may next and talk revenue help you first a us shortages if this about my you And the that something it? you in have mentioned others opening play then could of that shortages. to quarter some it's you for been from the of So, ship of industry out perhaps December the recapture wondered proceeds? your for number how if in obviously higher you not couple quantify would Can to

Chris, this address. Cristiano. happy Hi, is Yes, to

Huawei We digital industry. One driving that. across that trend consistent saw the sectors were acceleration also think, a of their have of We represent There expansion present is of market now. of and think, all across many us represented Qualcomm it QCT, have transformation the or becomes home. market. with factors entire of I this of the And we probably recovery, that our enterprise opportunity is shortage OEMs. of especially couple -- to the available addressable seen, I V-shaped of seen XX% an the for transformation across with

So, tier, a we premium second see that see and demand situation share tier, to now situation We're normalize that's year. outpacing expect we for happy high towards the the of half right in driving is supply. fiscal In example. the the XXXX on what we gains

you Okay. Thank the fiscal you you. clarify. comments could And with some about third quarter, perhaps that, that made

to similar QCT you're for, that talking you that First something on And growing if side I side, margins the of QTL think go for us profitability to you should X% the to levels us on the to you your March quarter? that, with mobile operating view with said at regard then can guess, -- the reconcile would And be about units, assume profitability you would with handset we what QTL, sequentially. doubling help gave with were doubling. I on guiding similar that

Chris, Yes, Akash. is this so

quarters in the of market market past, see to March how the and market as the in QTL, said between going overall -- we've June mobile terms think behaves. we're I consistent

it's is fair I June so a it. data provided about for thinking reflected we the what of that's point quarter. way think the QCT, And in

numbers quarter is and strong, we their what points basis the profile data From of is natural just we is their year the as to now in Apple third the our are revenue reflected of revenue We the purchases margin earlier. we -- reflected scale business it and the stream timing kind just the in the have expecting going extremely of seasonality fallout in profit is discussed from of really providing. year-over-year be to are that within our doubling --

you. Thank

Joe from proceed comes Morgan with with question Moore Stanley. Please next your Our question.

can can look you potentially give you customer the if one than of wonder at December I'm really is on going at of the growth drivers growth in kind look when being you region. kind one RF and sustainability how those at millimeter-wave color robust you doubling, impressive I talk and at when and you. us Thank the forward. surprised revenue units of Great. XG to so more just levels

been saw Joe, Cristiano. consistent We Hi, beginning the saying entry us. point Yes, very it's of it's to as have we an what XG XG. for since

those a have solution modem-to-antenna differentiated with of all designs. platform our highly and We

diversified think updated RF is XG only prospects lot accelerator design XG we millimeter-wave, we we our across a it's definitely it's now front-end millimeter-wave that's revenues contain I Also excess They in XXX that very for like the expansion though designs. even the count of happy customers, components. front-end all with also and Qualcomm. sub-X, of are of with not an very RF

and it's So, of we billion grow we'll of growing the fastest as the one to happy is XG. which we grow $X achieved business continue have. business we a We're threshold now

Great. Thank you.

you. Thank

comes Our your proceed with Rasgon Bernstein with Please next from question. Research. question Stacy

Thanks Hi my questions. for guys. taking

First, I guidance. to chipset in the dig again wanted margin

dollars to rolls presumably that's be the the getting adjacencies. negative in grow. on So, incremental down But like margins. off they XXX% It mix Apple million stuff the you're $XXX and revenue profit chipset decline, ought sounds handset better like over $XXX a about million guiding as sequentially

revenue going down is the in Like trajectory? what much, like margins So, that there? coming given the on why are

Yes.

Akash. factors, of couple a So, Stacy, its

with OpEx First March certain And a prepared typically history. you have is, that see the expenses between the and of the in happens remarks, as on of is this side, growth I OpEx my kind indicated quarter. consistent we December resetting so

at of back past, go you increase. in numbers the see and kind same the you if our So, look

margin So the impacts that a bit.

pockets profile. the some did Second our in gross December is in margin certain quarter strength in see we

forward quarter is trend. So, the higher December what some than with gross was something recent consistent we're margin in our recent profile guiding our trend that's and

that, but of course, execute we're to upside our guidance. would to something be be try to any it'd to on, So, upside that going

on Thank QTL follow-up I then can if you. margins. And

guiding you costs what you're in were running to you on, you're to line So that were like lower the whatever In legal billion at you've midpoint. $X.X presumably were actually had higher margins it higher. is, XXXX, revenues, that, than XX% $X.X $X.XX guiding were now at that billion, so higher billion than with

So, going like side, QTL the on revenue on on margins what's aren't why this higher level?

you Stacy, numbers on. back something is if don't in to front Day, specific -- target thought where go margin we and in there than are for for the the it. executing QTL XXXX Huawei Analyst of in Analyst to think of me, laid have very for full going Yes, the on execute I be front result, year out the we no you mean, I we're back We much Day but the would with out. good laid go year we to we if XX% to place what you higher

Thank you.

with Our questions. with Barclays. comes proceed next Blayne from Please question your Curtis

question. taking for thanks my Hey

seeing margin going you're of impact kind kind comment kind the an the costs rolled yet input whether of and EBT or given shortages on just on just you margin? revisiting could that's in that's side, if whether of to your forward Just and

and our to price term. longer Yes, our with agreements conversations and are tend suppliers expect, the I as of lot address we how Blayne, around be a you'd think, supply customers on generally

history that's and the kind to as reflected focusing on, supply. in focused what's are our we where recent Margin that's our and on being good customers partners consistent is really of guidance. with So,

the June doubling then profits. just quarter, of QCT the And Thanks. for

is customer; new Android you that's there typically be obviously, think, side, to may the market quarter large seasonally the just stronger going the a particularly if I down on double.

profit. down just like kind that June keep from to of of looks So, to Q-to-Q the be pieces, would March moving actually doubling sequentially

your just So, on with that? Android your within outlook any perspective

Blayne, out isn't point there like I'd to Yes, specific that trend a there.

I between think remains of quarters on the consistent Android. our the strength -- business our

I want small -- Maybe add point. data just to a Cristiano. is this

there we as if a QCT Huawei of U.S. go to outside in one the with gains. pointed see and very share seasonality at we is you what growth high-tier the terms But for us customer. to If because happy throughout actually we're as available addressable and that, market look -- what large going the I is is, to of from that especially a you be happening premium outlined, high-tier and that's story, quarters. becoming Akash premium

you. Thank

Our next Bank of Please proceed America. Tal question comes from with with Liani question. your

guys. Hi

smartphone year to XX% you a to little of composition be -- color from You color give last go year. any this the on high this going bit single-digit year? kind types Can us smartphones, regions, going up up guided of the minus growth of like of also of

hi Yes, Akash. this is Tal,

was is reiterate how market, plays COVID single-digits continuing the So, in critical XXXX XXXX grow our for XXXX what what's the driver guidance to it, XG kind of and to that within and just XXXX to this we out. first -- us reflects the XXXX XXXX impact half then saying and in recovery Really really are the second calendar XX%, would market down high half. to calendar -- from in

to from million XG you to million. And go a XXX XXX so XXXX in our expecting look at forecast, if it up we're of midpoint calendar

in strong of the was Huawei demand. mostly perspective, out chip is expands terms was OEM and has key us our high revenue then on it I'll for kind very And how silicon their was very and that's -- growth from of Cristiano's maybe side. been chip thing a driver to it the satisfying point comment really So, a earlier, last large that

being available Now, of not before to with was XX% the market have we us available. of in the that market, change kind the

as further of expansion of we out, kind pretty this we for see SAM us. material as So, look a

-- growth QTL. meaning price the in at to improvement impact in high to the $XXX So, also just limit improvement as in addressable where this understand a going developing where be the translate for it on in the growth what's follow-up, the for QTL anyway if the going growth growth, to ceiling the market hitting level? declines end is can price? the impact price countries ceiling or the market, total is Meaning, of trying of going of to the mostly the to markets from you're is high the times be in units I'm

Yes.

think I us. the kind just mix QTL is lower richer perspective, we the a tiers. ASP makes the the see goes of for benefiting XG XG So, ceiling, it into way from Below

people as at not has buy we see As for again, more this But and opportunity materializes. QTL. would they devices, we our planning upgrade it into be forecast a upside expensive potential point and that devices we are -- that it the

you. Thank

Our from Please Bank. next Deutsche Ross your question questions. with proceed comes Seymore with

both you all for aspiring and handling China coming pitfall? to a so are going the back period to guys. share and that side the me wins keep it where but you for the increase How to might to share, for get But back. that could inventory of you, Steve your inventory are side of potential share the potential build QCT shortage, and to there's on Hi Cristiano. wanted question issue also Honor the gainers first letting in might dynamic go take all, be dynamic congratulations Thanks the managing not are SAM. there? of avoiding I XX% ask and guys an design the realize, how in I the you

point. more revenue But so strong manage can do definitely something demand it to I carefully. it's we Ross, opportunity sell a our at more out, that you from we mean, increase OEMs. Akash. as is have rightly we and supply-driven to this than trying supply and various pointed really hey It's very have are Yes, market we of

inventory really with So, at point really -- we customers. that's primary our and concerns this the it's any have don't focus

answer your question-- I If could

my follow-up-- As

to add thing. Ross, this question, want one I just

the Given customers, market of the is supply chain probably size sized for semiconductor the where those sizes.

some provides on So, inventory. itself that in correction

the Cristiano. in back Great. about of seems margin you're my like follow-up, as implied Thanks March guiding I three QCT side points the and I went And quarter. QTL I gross margin things, down to it then that down if goes up. for guess, color, the sequentially understand

So, than perspective, a would happen, that mix expected. have greater would bit but still I from it's a little

quarter. change a You the I into and about the prior the what quarter in dive upside little normalization a driving December to in was that there. answered would why question, March little a into bit wanted assuming that going a Akash, you're

Yes.

-- certain was earlier upside businesses by they we purchases quarter who customers than usually it would Ross, driven just December think, the was mix I across purchase. made have and So,

this drove just that and it's forecasting at more so, operational we're going forward. not mix So, that upside point the

Thank you.

you. Thank

with Our Ramsay question. next your Cowen. Matt Please question with comes from proceed

Good Yes. guys. afternoon Thank you.

I can going shift situation. the perspective? think Cristiano, thoughts and Thanks. this remain that been guys asked semiconductor for of that's answered my of that building from now Huawei all that market this no a -- I buildup question, a to guys had number in you, long to to the itself as may how that XX% finished to win and into share secret you point, the opportunity to inventory they potential but timing goods have inventories about think folks and market any present For first was about Huawei available you

in premium for Thanks your the tiers, whether predict measure very can't much carrier the activity. those seen range design a the things we activity strong inventory have, we we've retailer, really the portfolio Matt. And -- Hi through based have said I in already why get market's or how you you on range on and as earlier, question. Look, especially high the they we and moving. design get

in about activity see reflecting in But the wins play because iOS is Vivo, if and well-positioned even companies design they'll a very out. like we're already the we'll well say that will there how and portfolio distributors are we're or if, Honor because win, Xiaomi we see over the Samsung If very how -- wins, right it, that's switching positive wins, the Oppo, We carriers now. Android if of time, I think hedged. position, and

in on Thank for made The cores guess be, unrelated team notebooks, for number the of the some the would CPU you. portfolio had Snapdragon a Akash years XG of from and was acquisition cetera, I few include acquisition there you Chromebooks, the prices, consumer signal question. I any your licensed the it. interested there, around I that ago Thank changes And that. NUVIA into I side I helpful. et might ambitions think, NUVIA. two, wonder if about connected, an is on, TAM, be there more ARM on follow-up dependent markets what comments guess, Got directly to one. intentions that number

very received we start support across the the have Chrome. the every the you Windows about will and computing with announcement to was let excited And there, them. And there, shift the which we two, incredible me on OEM We're ecosystem is Matt, I the single it's that that entire then just -- both it to from TAM. mobile talk apply ecosystem, the exception made, So, Akash about of one doesn't really you clear, was and look very if thing acquisition. really probably to

conversions and us, mobile basically of view this between full we For it that computing. had reflect

key and are I the step the with obviously, Qualcomm, is that as smartphones, computing Windows function beginning very forward. Snapdragon opportunities performance of our us premium as across a advantage that the to the in differentiation to for both increase going be think and Qualcomm do and for a program power with -- create likely segment in well we of

addressable important you is million think hundred for Chromebooks a what's market, very a and couple able And of this market -- be assets it's mobile leading of us to that market units, and other really about for technology the address the to in is fashion. if we -- address large this CPU -- and the right? over PC So, and with really in the a that combine CPU differentiated market along have for

mobile feel has and and implications outside And also auto pretty -- so as CPU IoT that. to into we say market do phones our lot with good ability along I'll PC well. of about the

that's broadly asset to relevant we the end going an be it's to So, pursue. markets

you. Thank

proceed question. with RBC your Our next with Mitch Please Capital comes from question Markets. Steves

here, looking of the just couple back of kind guys. had kind thing, full to at a Yes. Congratulations the questions of just inventory year. I circling

look Qualcomm on And mean, guys So, the going know this idea to better don't back of maybe secondly, some you they're I question, the mitigate have that first, people then from how overbuilding way kind if share the calendar the to are year going that what going you major of half it should to calendar is balance at I if revenue XX%? of more XX%, look you but do year for a in Apple look terms be is full a think a trying I customer does like like? ask kind and drop-off? Huawei maybe Is guys? gain year to how to basis, kind guys side, now, of the of year now guidance, smartphone give Just full kind

profile and we're again, second holiday question, into just the going your quarter look launched fourth our the as flagship all being third devices on to we quarter, the way have if Mitch, the of right, at going go season. go past customers, you to

become area strength quarter kind to and relative June. So, it of go does we a pretty September of December as a into

in revenues and expecting So, that also just front-end we mobile not to significantly, win in but it, strength to design and see goes continuing we're auto, in are then RF pipeline. with grow in IoT the

really the it's across So, board.

availability maybe what see we the maybe outpacing supply the that. And market. this your said demand in is and really don't sell-out, -- to first before, about and Mitch, sell-in we reiterating heard we see lot We see question, regulating supply don't discrepancy I a think we actually call what's between

at So, this we're point. concerned that too not about

demand giving what's continues curious the guys XG? what do causing maybe can guess I you to for is year? confidence surge? I'm I the just sneak if of it think I you just that so that this as Is guess rest the in,

can Mitch, that Sorry, question? repeat you

the out-stripping So, you guys are saying you're sell-through is confident fine. and that demand supply is

so the to cycle. demand is why significant as curious versus I'm believe and So, you prior there it's

It's Cristiano.

right? it address one. both, single-digit, as key we're in Huawei our It's XG expansion the well growing couple the growing me I and is faster been as addressable than QCT, again. driver think, us, market are expanding a for that that's as been grows the into saying, market market XX% things, I example, We that on that's think have we a a of Let

supply is one other the for on the on it's the the with numbers and I actually confidence is and -- to XG. we guide chain good the the We -- I not to million XXX guide of we is addressable robust, of an device end see range upper the XXX transition it's been ecosystem -- our handset. the the we calendar million, industry, units went giving side XG for guide That have earlier, unique high in we said and seen across so year, the The to XXXX, move broad think of market. it's XG situations, all has is expansion

of the towards industry get also the the recovery, but XXXX. acceleration V-shaped We of saw it digital in should part across transformation later normalized the

you. Thank

the with your with Please comes Brett next question of question. proceed from Our Research. line Simpson Arete

flagged. I shortages much. a just very to dig Thanks bit you on that Yes. wanted in the

you have get things we bit do the you. going I sort maybe shortages? just of to about the to And what of Is of Is you're specifically in June having sort seeing happening quarter X-nanometer the and do back shortage talk more a situation? more some source before premium Just it or come of specifically, normal? half main when challenges segment of that's you're the more the of wait sort out that what's is challenges we with to or Thank the it and the you flagship think here be of PMICs operate impacting sort is second SMIC? here? you for can mean, yield it

semiconductor answer only the the question. nodes. shortage simple Thank board, is industry but leading you also your is for not in nodes the legacy across Look, the

process you and You in or and in lot should it's of products of the it used legacy think consumer a about it's that all lot chips. is electronics RF whether automotive, that attaches, power of used used a the -- chips management in see networking also

quarter your think supply. in recovery with is question, new I'll normalize industry to expect, X-nanometer, demand towards in to later catch-up early in of we ramp as to our of the see on partner, across shipped a semiconductors consistent XXXX we seen this we've to to and part the new process ramping we're -- for XXX some of driving Specific capacity and more other probably V-shaped of sectors a this ramp the time we industry of the very the put that and our all place for is and the a Snapdragon the process; argue seen the a that across it's So, the digitization I across -- accelerated that expectations. we've board. with we

Thanks. a follow-up on maybe And Okay. just QTL.

lot use QCT using is Thank are for think of XX and are sort opportunity there you. referenced you you've we very spoke specifically top-XX autos autos agreements backlog. rates of are we something us autos? cockpit success royalty you for cases platform forward? $X.X XG, and can mean, royalty how QTL expect about with I given for what I the automakers do in of having mean you're billion -- How here about So, can in in terms the going the you share a different a some going the here regarding the got of and

automotive question. We've This for licensing, Thanks the telematics the XG, actually XG good course, units have licensing a XG in of having program had road not hit for is We're with long-term a lot yet. Alex. our XG. quite success of

in the We haven't future. time, details of program but particular at or the point licensing in structure released some point this the royalty at maybe

Thank you.

Please question. Evercore. proceed question Muse comes next Our from your C.J. with with

here XXXX. two how thoughts now millimeter-wave to quarters could the Thank had provide you taking love if about growth a if there, doubling about that terms framework trajectory of in growth is guess, would curious the Apple afternoon. Yes, I in beyond, any calendar that there XXXX calendar XXXX, with question. can? in hear to could the provide thinking you for good you you question, front-end RF into versus in XXXX first and you Obviously, of think

Analyst Yes. Hi we Day, market. $XX the for the C.J., XX% business. we We want off At RF greater Akash. than of be kind said it's laid out to billion targets front-end an financial

we that confident achieving the an versus our in we way accelerated fashion that out. had very are on We timeline laid to are

we'd fashion. said able accelerated like feel we an are So, in to get and there -- in get there we XXXX there we had

So, pretty about happy that.

But, and guess, you've I margins that's EBT a a follow-up, bit helpful. number QCT. to questions, wanted guess, the front I on for as supply little I my differently. had Okay, ask constraint And of

higher to wafer the might contracts with how about OSAT later versus the in earlier longer should be about term year In costs that, costs you. pricing, for of higher of growth XG, QCT there? you the from time. we And perhaps Thank higher XXXX. trajectory margins calendar great step margins curious earlier stair have that set showed mean guess of talked another should in of terms outlook how we and be as and for XX% seeing kind for thinking in you you I XX% what year your Considering over calendar and part

Really are we benefit both margin we cost a for as from operating had and course, we that C.J., guidance kind consistent cost look what looking much the well and, not margin are the second execute of fab as of at perspective get as we've from of the providing. businesses wafer scale perspective, leverage we feel with also really really our to profiles just kind of It's and and Day half you that and Yes. year, a story that forward before of strong expected shows outlined, the we us. long-term of from growth benefits the up. confident Analyst will we all can to revenue an across

Thank you.

UBS. Arcuri Our final the of Please with proceed your with question line Timothy question. comes from

Thanks question first just on a is guess I lot. QCT. my

for off March think, the XX% I a last call and So, as down you guided. about was it's bit it down, you'd now little QCT just guided of base, December

the that's and constraints of -- talked even some you despite had that So, about.

than better little three actually it So, thought on licensing what on worse component despite being the even ago, months was sell-through bit than March COVID. thought story side the you that that's is but due the to really is side you

is QCT the you businesses opposite ago? two what so going is And I are is than this of months guess, saw why these direction. three where quarter much fourth in better question first So, the sort

the to back it's the a So, I I why year. why you understand guess wanted get -- as Cristiano, I of into better problem think half Thanks.

Tim its Akash.

of drives of one saw we March some large kind this quarter the the the direction, factors key two going the case, purchases -- -- timing by so businesses in purchases different in going in customers just is things into and we the accelerated June. of of One that versus

the timing story; depending there the timing so strategies makes in just financial on is and kind for just an play things to sell-through based it's performance. how people different buy we see trend, underlying But when as of And inventory The customers. impact out on of improvement no when parts. our specific out play it's how

Look, can growth real add it's drivers, growth driver. thing of the this IoT the the just showing if growth also beginning automotive is I process, quick. driver, Also, one other QCT maybe but like

more you're correlation between the two. as I to have less So, diversified, business get over the going time, think, probably

my guess Thanks. question is And I on Thanks millimeter-wave. for last that.

some millimeter-wave do of of the or build at about you of was megahertz just So, leverage the Thanks. two U.S. about see talk of end it's out I in think maybe is XXXX in Do you some U.S. CapEx to the Obviously, know like here? out other going year. there. it of I C-band to seems have to driving to building is over it of shift and talking first beyond. big adoption this next carriers just going you lot the their pace that lumpy, are XXX carrier going growing Can for guess, millimeter-wave? you be the C-band a of the years. And clear kind from that

of the their of with United activity need customer premium as with to some very the in had auction for saw pleased continue at the I one especially Look, full more across gigahertz Germany millimeter-wave for think, Hi. potential very price in are for millimeter-wave continue we you millimeter-wave restate smartphones, brought and beyond is of millimeter-wave China XXXX. This look devices devices. for that quarter, likely see points XG we what to and at of Cristiano. our millimeter-wave applications see to requirement be In we a We're that we millimeter-wave. have the see starting is we what the you We all States. to advanced indicating pleased large said, rules this XX

as plan, QCT. So, as what probably we're millimeter-wave our and is we you multiplier happy progressing accelerator we see, correctly, in said it's it of an X.X

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

you. Thank Yes.

to of know is Cristiano kind I XXth who This gave on way. the count correctly, call. my folks the same call, the feels want actually, First thank words earnings I I if all,

exceedingly So, the I And you. making thank a joining well-positioned. team, forward it's I hard it you for from record. look where Qualcomm the us Thank today. all appreciate goes; seeing to work company the

Ladies and gentlemen, concludes today's this conference.

now disconnect. may You