QUALCOMM (QCOM) 29 Apr 212021 Q2 Earnings call transcript

Ladies and gentlemen, thank you for standing by. Welcome to the Qualcomm Second Quarter and Fiscal 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions] As a reminder, this conference is being recorded, April 28, 2021. The playback number for today’s call is 877-660-6853. XXX-XXX-XXXX. dial please callers, International The playback XXXXXXXX. number is reservation I to Relations. Mauricio like to call over turn the Lopez-Hodoyan, would now Vice-President of Investor Mr. please go Lopez-Hodoyan, ahead.

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

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

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

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

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

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

Thank QX you, ago, that one afternoon, Mauricio, Much pandemic. were joining Thanks since of define including has will we future stages the the just in early year this our year. we past When happened and us today. things beyond for then, good reported everyone. many well

in In reliance today, have things has mission. experienced are citizens low at San here is and and This high-performance for undeniable importance an the we is pandemic experience devices. amplified in have I reinforced the we pace of Diego the everyone our optimistic robust global want power, acknowledge connectivity partners need horizon, Sitting One what the time and on and accelerated the employees, different you the on nearly our to about impacted where today depending last world. and in at year, are see yet customers, while India. particular, same on the the very we

have and thoughts is career support Qualcomm, we company today. in very mobilized my our leading are the year Of through families this time. your results we me list our challenging at of you that like to strong XX-year are and to reported past the how You impressed things during here top many the in at the

earnings fiscal exceeded per second challenging of our and the ago, year. XX% our our technologies, and a guidance Our beyond when deliver Several results reflect Despite a expectations. better revenue importance the quarter across and XG, expected mobile which the years of strategy not fiscal lead performance higher backdrop started we $X.XX in industries. of all year, the this and high growth are driven fiscal what year-over-year track of unusual the end representing and our put Even than licensing we delivering with the to many we challenges, to our in but industry, today results we business, is in share non-GAAP respectively. by place on company results chipset of solid the strength these guidance EPS revenues non-GAAP XXX%, environment, of the only to

industries exciting As I to opportunity and a unprecedented overcame years. when opportunity as Undeniably our CEO, underestimate back I performance over dealt position and looking with challenges, roadmap. which well-positioned always I in as in my perspective. I tenure over how exceed past long-term cannot success most is This company the have unique where rewarding enviable find current is, put handsets what the our seven we the is, for the as wireless Qualcomm adopt

hard communicates do. Our mission focus inventing is world to and connects, important transforming and singular and technologies, the of how breakthrough computes

at on the solution. always focus tightened this challenges mission core was our the and Our innovation

lost never result and governments efforts. stronger XG as result, customers, will enters a importantly, Qualcomm impact consumers our focus our and opportunity on and era more partners, the with our company a whole of resilient. collective worldwide the bring we As digitization Most to

change as lead will commitment everyone Qualcomm, I former values. and the out. industries very can thank Speaking a is now and the at role and ecosystem. know for watch tireless can Qualcomm employees, he core global this we our excited our devotion of culture over to virtually of on exciting the your enter call company world the how can as am people soon-to-be billions Cristiano turn they CEO, the there it for no all where Cristiano. to Thank to around you. to inventions is I very play you our limit the know I in lives To witness the I strong will. play believe I

you, the Thanks execution afternoon, the the challenging joining in everyone. today. The reflect and good of technologies. and reinforces significance Thank guide across for us a quarter in Steve, environment company our great very

the are experiences. XXX handset premium our market positioned synonymous with the The high-tier Snapdragon XG of as along has Our into our flagship tier and now this foundation modem-to-antenna expansion our with addressable Android and Snapdragon strategy the in RF future. tiers of front-end smartphone products mobile

now traction be continue platform such tiers, as for with Xiaomi, of leading and to Oppo, mobile choice this our both performance well reflected this technology Honor. Vivo as We as Samsung, smartphones product in and is the our OEMs

now months more mobile latest announcements. and XXX the globally coming from shipped more Our product this platform market in has double announced to generation than come device XX number or to than XG future expect we Snapdragon see

us smartphones, most the and differentiated using have highly modem-to-antenna of being tiers, faster while significant capture transition front-end, adoption differentiators and in positioned to Our design solutions in and OEMs continue position modem-to-antenna continue able In high the volume grow continued of to see and and portion be our performance XG of of to reach at RF our growing key the solutions. to leading revenue our global system we premium broad to leadership our solutions. opportunity. ease of component level, Huawei the

our whether they virtually solutions design our reminder, a support to powered XG by sub-X XG front-end XG, wave. be XG millimeter all As of or RF continue wins

track note, in Beyond rate, broad IoT our the RF automotive, category. extending design on sub-X RF XXXX revenue PCs, we run wireless and we’re front-end fixed billion exceed pipeline are fiscal of mobile solutions Analyst our representing $X.X to of given year revenue Of XG access front-end win smartphones, majority the with our target by and in front-end XG Day hotspots, our RF revenues.

live Chinese expansion expect and Unicom, the silicon high Congress as and the beginning Additionally, geographies, wave companies and a level showcase across to to increased Shanghai upcoming millimeter into also on wave for GSMA, well significant technology general to growing World applications XG XX China we XXXX and performance automotive, CVXX, worked our we’re due and network. computing millimeter opportunity other platforms. China At in cockpit, ZTE with rich expands value. Mobile content opportunity China positioned ahead Car-to-Cloud attention and the in we’re we of significant XG the digital ADAS autonomy, In in collaboration in in of millimeter telematics, industry-leading This collaboration with and underscores wave

We connected accelerates. expect cloud in electrification to the lead and the segments of evolve business as car models

with leading makers, important one of for digital automotive we capabilities chassis industry across partner becoming of auto assets technology this most all become the are a the domains. the As

consumer, and physical the end computing, year. verticals about spaces, OS engine Chrome industry fiscal of auto, the IoT since significant consumer, expect the $X is with industrial. second of for the up revenue. NUVIA’s namely personal Snapdragon achieved enterprise of Along all approximately win mobile, our and Trends the are growth Android, becoming of of across with our CPUs of over digital products across and $X of leading us. such intersection automotive personal largest broadband, home, the and by transformation over design the categories, in as confident ongoing networking expansion billion redefines conversions virtual opportunities expansions is we’re a computing quarter We anticipated SAM the pipeline end the better new growth In calendar with next consecutive performance driving billion to XXXX one Windows $X with Our than as today. in in where transformation billion in we growth of the many

also investments the we the leading a ecosystem. Sound Android within Wi-Fi XR Wear are points wearables, will Snapdragon believe in scale. seeing growing and category platforms in of networking, in leader We’re technology in XG solutions reaching access become the our In early we And Snapdragon broadband.

school We’re work, benefiting the remote X and the from and migration and required to Wi-Fi play, for connectivity global technologies. mesh

Our broad XG seeing adoption fixed access are globally. wireless solutions

industrial, Going retail, have we private drones. Key and industry forward, adoption smart energy, growth tracking, automation In of continued metering, includes few, a expand handhelds, the autonomous to we seen into to also open broad have an our industrial name across public RAN. technologies XG segments. areas and upcoming opportunity networks

information business. contextual connected the scale in growth and we’re As the the cloud of edge that growth fuelling confident to and get projections exponential provide ecosystems, for opportunity data is access our IoT increasingly long-term devices IoT

business. our licensing Turning to

Our second unmatched quarter strength the of patent portfolio value. reflect results our

We manufacturers handset globe to-date, global more around XXX leader the XXX all agreements major from IP are the signed than up XG license quarter XG last with with licensed. over

multiple to working we’re continue our continue new unprecedented demand entire to supply to prior standard of processing the impact businesses shortage, future stockholders a research all we of flexible opportunity. capture value development, environment generations industries. and for than to longer the will with scale for XG, as and Overall, leadership, across industry-wide global chain our partners innovations connectivity to continue implementation our to the we supply our scale due lifecycle We and on patent develop our across and add to ability see licensing, and model believe early essential of current technologies accelerating which support is its expect global edge. maximize and and years Despite have come. releases our of We that consistent semiconductor utilizing to to the this at

to expect We the initiatives. and builds by planned of improvements end due capacity year material calendar multi-sourcing the

the priorities. we’re excited one advanced foundry strategic United of semiconductor in States United consistent more States to As drivers leading see the government’s investment technology the platforms, also with of

of Snapdragon. NASA’s helicopter over and the call first-ever is like turn our Akash. helped flight Ingenuity, the another another laboratory yet Mars Finally, the Mars power Snapdragon it made to ingenuity. on example planet. would to by jet with of propulsion collaboration autonomous now to on This I we’re extremely our proud powered

everyone. and you, Cristiano, Thank good afternoon,

strength non-GAAP recorded by China. $X.X above stronger of primarily of EPS both $X.X the handset and was and The range. driven margins results $X.XX, and with We XX% above are quarter we across reflect was in high and driven of high outperformance guidance These respectively, QTL, which increases revenues to EBT guidance by our revenue QCT. $X.XX range. pleased our in strong the end year-over-year of billion EPS XXX% especially end of and XX%, In QTL shipments, revenues of report of results second billion non-GAAP

grew driven results the orders within million operating benefit than revenues delivering performance a basis, million products $XX our product range $X.X mix operating reflects gross were second prior-quarter commitment OEM. and less XG royalty reduction wave. we of quarter XXX%, XG, our a with millimeter XX% than achieved revenues. handset EBT our the We QCT, which estimates. offset a up portfolio and addition, more margins, XX%. sub-X, the guidance XX% leverage. the of of revenues our include on product to of front-end RF on XX%, approximately strong our strength our adjustments In wave year-over-year global In billion. increase by high XG quarter front-end EBT revenues XG a margins to increased by $XXX and of end of RF favorable for approximately $X.X across This delivered accounted year-over-year to of EBT in from billion On while millimeter

other year-over-year we grew as billion such in revenue a be for on to our China strong differentiated continued see $XXX a We XX% expect XX%, Automotive deployments and revenues regions millimeter grew of long-term portfolio. to momentum growth. million tailwind IoT as product of for wave revenues $X.X basis

high-performance NUVIA provides other processors the acquisition and we us CPU completed acquisition a SoCs. billion expertise the and industry-leading adjustments. This before During team with with of capital purchase a $X.X for in strong quarter, working price of

approximately returned $XXX consisting billion during of billion Lastly, in stock repurchases. dividends million quarter, $X.X $X.X in to we the stockholders and

quarter, global Turning our handset high we upward single first the relative bias to digit forecast to year-over-year on Based XG/XG/XG estimate calendar have growth. for of XXXX. the prior an our strength in

to continues estimate an million of million XXX XG handsets. forecast XXXX calendar to XXX Our include

and QCT summarize I’ll fiscal in stronger to our quarter. prior shared third guidance last tailwinds. We Next, expect outlook quarter several a QTL to now due positive which we our both for relative expectations,

at year-over-year EBT billion, of $X.XX We of midpoints. XX% growth the to to margins year-over-year of of with XX%, XX% expect are and the $X.X revenues $X.XX at billion $X.X up to XX% forecasting and midpoint, $X.XX revenues with XX%. billion to respectively, billion non-GAAP we In of EPS $X.XX QTL,

guidance QCT, bias our year-over-year $X.X dollar revenue than XXX%. to revenues handset XX%. to positive midpoint total higher we and the of XX% the of million Our in At represents EBT estimate of and estimate, $X.X is billion previous growth $XXX reflecting growth billion XX% margins revenue shipments. In EBT midpoints, this of

for QCT design traction mix. and in forecast in handsets RF and product stronger Our IoT, reflects improved upside front-end,

for acquisition NUVIA We are sequentially, of $X.X sourcing investments IoT. the technologies combined adoption includes R&D success quarter, IoT expenses a We which impact as continue we full enable strategy non-GAAP billion. pleased with anticipate to smartphone we SG&A In expenses increase third to to X% additional diversification extend the revenues the supply. grow our and expect the X% in quarter of to and and from of automotive to to

quarter, third OEMs season be across and strong driven for demand the to growth major by automotive. IoT we by flagship launches Beyond XG expect and holiday

to addition, by the QCT’s volume revenue In RF with handset handset annual opportunity up front-end increase and billion. estimate we of to continued addressable other $XX to transition OEMs, Huawei

portfolio, this from positioned our starting in opportunity benefit Given to product fiscal XXXX. we strong are

behalf thank and XX best as contributions his well-deserved of I to Before the years for for a wish the I over finish him on past my prepared Qualcomm remarks, all retirement employees, Steve CEO. want

and position. to front rest tenure of successful and the Thank on capitalize look Mauricio. working a company to Qualcomm challenges the And he call vision his strong and back financial to the with forward in Cristiano us. CEO, build on team strategic During the now to put in significant navigated turn opportunities the his as you. I of I’ll

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

Thank with you. is [Operator Canaccord from Genuity. Walkley Mike Instructions] Please proceed. Our first question

the next June for the gains some terms for the is seasonally is quarter guys the are you. strong SAM then with on a wishes you the fruitful just Congratulations you of constraints XXXX guidance update and, view hopeful but potential still QCT could opportunity Thank including adversely trips the supply there us My for if you. half for just group my on touch Android Akash, is for with Steve, you. June for fishing best Great. results that whatever question strong, quite softer just installed at you guidance second the you impacting your of Huawei could into highlighted quarter? follow-on And in for share end, Thank the maybe calendar any the base?

orders saw quarter Akash. seeing helping a It’s third the From we there had Snapdragon since redirect take continue Mike. QCT OEM seeing our to to we of when Hi, to improved – were I’ll benefits Yes. that see What then strong we first reductions handset margin OEM, terms to and to set and product a both one. across we’re which both our in tiers businesses, we of in of also kind capacity optimize really a the mix, across constraints we able take a integrated is products by is side action with of lot are profile. perspective, supply product broad were which able large really we mix on performance.

So a of combination things. it’s really those

So the actions while to optimize we have. the constraint, manage we we taking remain been within constraints in mix supply to have

was... question second Your

extremely we’re happy at is in I expansion. Look, can terms Cristiano. that. take This opportunity of SAM Yes, the

well a as is mature, that. see positioned you market such Qualcomm about of very often If billion. an you And that look don’t $XX for of at SAM which is expansion mobile very

to far customers tiers well customer as premium XXXX, base in high It’s of equal growth and our as and ability with as business a XXX opportunity. great across have to traction be the drivers for new half second that’s happy and very front-end our the with one Honor, mobile largest as the our going premium alongside RF our Android. Snapdragon So we’re have we

you. Thank

Thank you.

with Raymond Our your Please next James. Caso is with Chris proceed from question. question

end incremental as the happen wait and, some comes in supply order question to supply before lot And My year of your have and year best. XXXX. remarks the in and of to quarter and introductions? do Yes. that, you of fiscal sense how typically to in Can first that Good the give a product toward your about at customer the we you beginning follow-on Thank to does is afternoon related attack until supply, the Huawei being Or Steve, the introductions you. how in of replacement much market prepared space. that then? us in volume? Android coming the December all product talked able get a to with congratulations align that Again,

This there’s there. in lot Chris. a Hi, Cristiano. is Look,

position start constraint only just other. product overall It’s is or we in demand Frankly, me supply confidence than good that smartphone. one semiconductors all to our all not supply across business. growth with really gives us actually it’s the the It’s about the a position. supply. good a Let of unique to thing across us The not sign, for that’s lines. be And in have more

We and supporting stability turn in ability the capacity. provide have are to and scale our our be with of of capacity planning. stability suppliers’ We get demand we that utilizing can

that have with have are node, multi-sourcing lot We done at of and a of to the we the the few do leading ability our one companies roadmap. that

outlined us on gives extent All full of by the the Huawei. think us billion improvement expansion $XX very well end the and XXXX, that Akash positioned of in material combined, it SAM I supply for XXXX, as

about we customers to introductions. I product and to go how back your customer Now, want question our about think

the for Qualcomm, with a As in making and said tier. progress before, is That’s very mix. opportunity we’re and premium the in reflecting we’re product I great happy high

growth, also gives that and products an with to value numbers a demand us on premium have to ability to now still As the show focus than more have with both us have much-improved we we give to really opportunity still that’s the even in right showing more we as RF our front-end supply, customers us the side and attach mix. on product the

Chris, And it’s Akash. then,

those quickly to to really holiday Year, expand towards Chinese up for Just do lot launches bit, both end a of to with take add SAM. feel we and of New get phones us launched supply the going know, so into Huawei season year the that flagship opening comments, you the as Cristiano’s allows constraints into the advantage and the a that of

That’s you. great. good Thank That’s color.

on we against guidance, should expect that would for of that the it going on suggesting the that question previously QTL, based quarter therefore talked the normalized and third your Next what what QTL back as seem reflection the the you’ve you past? in revenue. is expressed Is that’s now normalized QTL the a revenue you’re on revenue now is forward about market is normalized handset and that that the plan is

conclusion. did which – reasonable June, and as a upside see we our upside a a that’s from market is that’s set reflected are we Yeah, within framework way go reasonable with in to March definitely We up, forecasting the quarter and market normalized in handset March the But we’ve significant is historical really consistent forward. the business going what the results. to model

Thank you.

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

you. if just How more out in kind is constraints, environment? And in I’m wonder when if that play placing Great. orders an situation? the how new can order like tight am then Thank give about on a long that’s I you of talked talk maybe the you’re about color in not How terms from waiting? in does you. you now allocated could vendor. one of I Thank you if backlog, reduction us the supply

breadth in all that including expect, have any with towards given Yes, supply across Really we kind just working the orders reductions but we from and an markets redirect Akash. really highest adjacent we the Joe, of auto, demand broad of have IoT benefit it’s mobile margin take to the product on customers. our OEM you’d of our not of as

one a customer our It’s So available what’s obviously to thing us across the supply June we benefits that’s quarter to our base, the guidance. took. of that’s really and able action in be optimize the good as reflected for

can Joe, if Maybe question. second address, I your

As far end get not much than better as look, the the going constraints, of at to supply year. more it’s

the orders we’re we in Some we see year that end environment. and much and fulfill the the of reflected even XXXX the more of guide, seeing growth favorable cannot results is into expect though the and a still supply to towards

Thank you.

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

for about guide Thanks I taking about guys. – businesses. wanted the to Hey, first across sequential the question. the my ask

versus down given a down X%. about like normalization is is I know What you’re behind of QTL the constraints the timing making? chip It in mix segment looks non-handset? of drivers of you differences about two the just guiding tell what revenue XX%. indicative market, of about between like you but the the guided nature thing talked You’re Is that us those it guidance? can the of interplay handset

Stacy, Sure. Akash. it’s

QTL. let me with So start

in second estimates expected remarks, quarter quarter then two were to As main $XX China total royalty was I than to our That handset the adjustments see markets. benefited for March of the benefit my that prepared in a approximately driver. the higher the driven by million did due And key for primarily we performance. mentioned significantly drivers prior units also quarter QTL

to some benefit QX. estimates obviously from strength kind on And then have December what don’t saw forecast March go QX the of factor the think on adjustment going more the market. is QX from normalized a when forward in weakness we you going quarter-to-quarter We variances, prudent into So quarter, normalized the to handset QX. side, is as in back but we it’s that quarter, market abstract the we assuming we’re second QTL really a in royalty

really perspective, quarter-over-quarter a QCT we’re X% From a what’s you’re QTL. assuming right, that’s driving So decline.

really framework, calibrates bit what so seasonality. premium product to and that March Part kind go quarters you’d of on – March little is so the If offset of the typically a launches that when our from between new recall, quarter, in tier supply happens anyways. as bit there’s little of by the you June, we a

drivers is IoT, mentioned prepared demand the my of kind The thing, the strong I one really very in that’s I’ll June So key quarter. have into and this we there. highlight going remarks, for

have forecast $X.X from of in billion a $X.X We March. increasing billion

happy see across the businesses. So diversification the to very

called that you the can If That’s Honor helpful. that have ask as does directly guess that’s follow-up, times I go, bit to talk that license potential customer you a specifically Can Thank on with out I signed you a and what both you. with could is tier about several where is or little a brief be, mean them, last any thoughts attacking your growth or to I them? Huawei thoughts that year, share on you’re case, transfer if your signed any them? have more a – with you Honor, average sign license new ASP Honor where going driver. a one you and did Do low the today, and have but over does to you license

this Stacy, Alex. is

Let just quickly. that answer me question really

Honor, and all licenses. Huawei We that is have with separate agreements now separate with under so covered

Stacy, is is really been had see but a our has a for high. and reflected – demand more is really premium And as to kind said with mix Hi, product where tier. as earlier, Cristiano. we high-end we market how that We it’s also lot and changing unique expect as I of a our portfolio, very this would product actually have their position you Honor across that’s traction focus lot premium

expect add, to it’s just our be do a And significant we forward with I’d Honor customer Akash. with add that I’d traction Stacy, then, them. going just

proceed comes Thank question. question you. with The Blayne next Curtis with your Barclays. from Please

millimeter you geographies Thanks rolling or I fiscal talked additional in I for about I China just my taking you curious really? any was if year millimeter fiscal out this year question. think to XXXX. calendar on wave, wanted wave saw ask this

Japan. Millimeter is United This commercial Hi, States is and Blayne. today in Cristiano. wave

We a in states. some in things Korea There see market. of Europe. as next few the completed initial you in a as the Its auctions also lot have signs see investment are

China of services lot companies Olympics the more and of is millimeter have about have China. we market. of to coverage of just markets wave economies leading Olympics the of and ZTE to millimeter around China lot and given are that’s the the the activity like change due about scale Right We’re we China getting of and we to a in working of as because excited to into now, the think starting Winter more Winter scale it activity a of will China the significantly traction reason China. China get The beginning wave, the talk scale faster dynamics Unicom

Thanks. you just And then if ask I you, highlighted NUVIA. can

You’ve PC market Snapdragon before. ARM been in the with

NUVIA for both the data there’s Maybe opportunities that where a curious, lot to client the focus in on as more elaborate couple as years Just well next processors. and center ARM see just lever plans asset? your best you

The NUVIA give of asset lot us a flexibility.

with You assets. Qualcomm having should think the together about to it as a asset scalable CPU other leading

are in we’ve been the with now automotive opportunity compute tier, we some earnings now of right course have in of saying right and focus is said incredible and what premium the what we call as Our an we now. phones and outlined and segments

said to right happy one, and is now been We across a device, communicator are a computing big in board In in Qualcomm, sure the leading to vectors different focused building and company. to the CPU. business Having us I leveraging asset that, lot position you of this relate of the the redefined. we’re for that think all PC case expanding flexibility I’m to ARM a architecture make continue happen this. NUVIA be to expansion transition really the we’re the opportunity gives how very very to Number use create with has some a

Thank you.

of Deutsche Bank. Please line proceed Seymore question Ross from with question. comes with Our next the your

and, in the Steve, gains me beyond in one I market. guess, for the for there give there you, quarters, Is about in given something years a puts was the in question just to that you’ve implications those talking that of instance, has of Akash, quarter when this deem guidance different us you’re ask had to of Hi, happening retirement. seasonality letting sort customers. able and you’re last takes guys. ecosystem, metrics? guess share one what Thanks a some heads-up Huawei calendar on Any half congratulations any I last couple given would versus the sort unique the the back along guide your over normal? with bigger this year, in of color be couple you the fact your

Yes, Ross. sure,

So not the that is let of think to fourth me while a rest at things this year. quarter highlight about we’re the framework point, couple a guiding maybe

extremely handsets, you profile, First really strong. is, just the when RFFE, IoT, automotive think demand about

We’re them. gaining position of share each pretty and very, strong much in all in very markets

you should those into think next and then vector QX into So us going a of kind of year. as growth of and each for extending

Second phone launches. is flagship

As I start the timeframe in mentioned they the call, August/September going in December. earlier through usually

as so us. improvement. for front-end favorable just Not well RF supply millimeter as without And launches third then for but with for or that’s is happen, a wave. handsets And the trend really those

mentioned, improve we improvement been end forward, very Cristiano the expect supply. we’ve hard supply to material profile of our the kind the on a year, towards working said with suppliers of As partnership in as going you and

So us will be forward. another that drive will vector that

changes. we’ve for with from frame be so are our the three the maybe those changes well. used in it then model And it’s way And portrayed market things can as QTL opportunity the perspective, QCT the seasonality really handset a consistent as to profile. that revenue QTL That

another quick Thanks follow-up, it. you. I one Akash, those for guess as details. for Got my

a margins Are see that perturbations QCT environment, side or there things, that cetera, the is between sustainable gross the margin envisioning over-elevated you improvement aspects auto, are know and margin just the prioritize of strong. truly IoT, delivered your handsets, gives of what the you’ve the gross happen the very very, or far QTL, drivers been has due mix to with of to in the between in can all RF, supply wanted I attributions that thus mix as ability today or belief QCT gross et and but the On at that? inflated limited you we continue? to side sustainable QCT that are

the able it as gross on that results also across in we for within mobile to operating us earlier take we that IoT, side products allows we each we for feel us that, markets have across and – have across as industry-leading way market. in have where margins. that margins. high-tier for margin gross mix premium expand on also kind the mobile also Cristiano’s of point we we’re but the we we it’s across And call, and Ross, like we’re we and leverage Yes, really technologies of do really really products, the focusing markets. premium price just to tremendously the And the of scalable performance have, a in the tailwinds those each Also, to expansion have not expand but that’s and auto margins products in that

Thank you.

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

or very Yes. much. EBIT Thank looked, went on mean, operating is you I non-holiday that since margins. and pre-XG margin. back mean, was QCT guys. had you Good pre-XXXX, I XX% I question afternoon, my I first Akash, and think quarter we’re a

sustainability and how think year, Thanks. about the about the a given talk June could we you Maybe margin, the quarter’s bit in there. done revenue little expansion for QCT, the going well margins should in floor trough that forward? XX% is margin quarter the likely of So

Yes, Matt. Thanks question. for the

We’re outlined margin mean, in execute a to Analyst months with happy ago, pretty to played be able happy profile at Day to and it’s and about plan I has we how it. we’re place really that set XX out. the

then and start the thing that just right. the growth us we to existing my Your an both most and highlighted as things important mean, and look prepared portfolio forward SAM, And IoT the there. June the leveraging Huawei as I observation approaching RF margins. margin really is to from a SAM in the trough remarks quarter and growing SAM, scale hence allows we have really frontend finally, is a us we gives products the revenue from for perspective, that and roadmap perspective handsets already that operating product the is scale typically into go across you expand from us both here, and

So there accretive grow be as as we margins. it operating to well, will

improving So, it and forward pretty looking we’re happy where going with forward. to at

that. Thanks it. Got for

were Android Cristiano, As a The or China. the for know, premium devices my think, and kind OEMs tonight follow-up from so dozen in RF a footprint across I that the to diversity I of don’t you slide both guys highlighted global enough share footprint I a investors maybe ability go have that we the as that more into portfolio. from your devices RF next mature sustain is of some bit or question still their to get expand confidence competitors maybe generation and as in stances XG

franchise? go do in and sustainable really the OEMs, the be as footprint RF guys. That the with as would helpful. forward how to those be So visibility you might Thanks, have any you – continue

that your sub-X the the mid a wave. highlighting DSS in spectrum bands a is frontend of points But single a millimeter existing some the and said we And maybe at The as it the every provide in to the we’re less wave come whether really wave goes people of in that spectrum, not Look, sockets. roadmap of question. of have winning pretty feel have not position level. kind Otherwise, we’re day, XG level, shows end to plus the that earnings and It’s through at what We is the going XG, data our bands. fifth be Matt, component the because you’re And our good it the RF frontend. for it’s the which we start about most system supplier that new thank to of across winning strategy XXXX, a look in was the millimeter in going RF in working. we of data testimony front-end. this some I your and to absolute beginning question. about thought XG of reality RF represent wave fact the that question to our when board, we’re we – were that would is frontend. designs now lot you at probably do product XG it win we winning continue it’s you if lot position launched business, we script. away, actually of at and millimeter And emphasize a multiple specific than our revenues leadership generations early now providing XXXX, in we’re We past millimeter of is a winning RF want leadership The only heard majority to we’re actually, and by the XX% which shown in great go

for we’re this business. and about growth Qualcomm, confident actually the a story is winning beauty very on this of It we’re great So technology.

Thank you.

Our next question comes JPMorgan. from question. proceed your with Samik with Please Chatterjee

This first Hi. on Joe Samik. Cardoso question is on competitors. is My for

commented One year. flagship millimeter bullishly targeting opportunities SoC next of wave, them pretty about

whether and forward dynamics you pricing aggressive the in share return curious landscape more just I’m [Audio expect of market going Gap] industry? So and competitive the

a Look, data in good this there’s lot of things point.

to I consistent great competitors China when validates point been it that read think a it. is a Qualcomm And very millimeter lot our focused how with premium we wave. saying. that’s of this an scale what of add point going are is targeting we’ve China, have to just data expansion data millimeter opportunity the going It’s millimeter has position benefiting. SAM. Look, wave in been with to tier. in incredible our high There’s and in wave. strong Everyone That’s

generate our everyone be forward. to we opportunity key an really be part to And flagship becomes that’s – successful going Android become continue and and for growth. a of mobile it’s think strategy opportunity to to I going premium equal we

is automotive revenue color the And Got relative during on target it. one just the was automotive then to the curious on provided RF Analyst I target, the the revenue my second but Day. Appreciate revenue appreciate color. opportunity. the

$X there that? the accounted are at Thank now billion, pipeline or of there? room is Or now pipeline is on target we to the make you. more even for, completely the With revenue north

seeing just our position really strengthened portfolio since digital the an then in this of or so just the market. we Day, kind and Yes, expansion on product is automotive the infotainment Analyst not really telematics and our has feel of within like side, cockpit, we’re

the So we feel guidance we’re see updating it with point, position we at as months expanding our we were this where comfortable XX versus not and very while ago.

Thank you.

comes Our Hall Goldman your Sachs. next Rod from Please with question. question with proceed

this content phones of back millimeter think into just bit per-phone you the and wonder how China wanted last looks you And we the Chinese to I’m part I quarter So things a to your wanted do then of that guys comment mature come of for where know I Thanks how demand have would Or I into result I all? increasing that I content the if you weak market you year. as a were thinking whether improving obviously the back particularly cycles see and on high-end observed I’m to just phase mobile if And that was Yes. on here. been that the backend we replacement through so changes basis on. that talk also year? come then I move you Thanks. a in a content the bit China. RFFE RFFE chance not quarter. that’s could phones to at on story of were here we and roughly mind think of your and similar? curious, elongating little little question. QTL about just more wonder that moving backend on meant but progresses that wave see know sorry, – kind the a

It’s Rod. Akash.

point, expected the on smaller was So expected. December was than the March quarter we’d than China bigger data slightly and really the in market slightly we’d

think I But going report you in it you gave. well. as the think it’s forecast reflected when normalize we a market of made your forward, the note it, in we about for which guidance really how is

for high we still of So single out. of upward metric what bias rolls have reasonable we rest and the think how given do as played year digits see XXXX, we’ll out a but has the

RF highlighted than today If silicon antenna you Thank XG a become you increases and RF it the you. wave, do content less on we front-end millimeter substantially. millimeter into deployed footprint. is once The device, revenues. of component across value accelerator the multiple you’re more and becomes RF frontend wave right. Rod, arrays, you’re and have millimeter modules When wave, a the And XX% that talking of wave a key millimeter broadly and is about frontend,

you. Thank

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

it’s the this average a of that a lot It’s out? I say, most the that revenue sort years. over $X middle of wanted out maybe billion. assume is you of help of age five I to like different the It’s but into Thanks you to how versus probably decade, nine up pipeline a size pipeline. if think and us But number, maybe parked now about ask can lot. something that auto’s that. the years I it’s that big rolls over, guess

So help on Thanks. can us you that?

Akash. it’s Tim,

was of So we one why to framework scale gave reasons – business. the around a the scale really Day revenue at annual of Analyst target the of put a

And so as you’ll in we’d recall, said billion be we XXXX. $X.X than greater

that’s like as so that earlier, we kind of XX-year we’re of scale thinking even the market accelerated so the said is traction timeframe. And that reasonable the way and well positioned in our business. to feel really in in a I still – continue And about at and X, to grow execute

long-term we and than growth rest the So it’s the it our adds and attractive pretty mix that predictable different it’s fact a business. like of slightly

about the within think give the the industry little when think bit well a about more we lifecycle to upcoming And a pipeline. a models. for the development is is exactly on The the awarded, technology you and award try is contract automotive is contract Look, get decision way I’ll color our building and usually made timelines. what that’s we known, is when it you

they assets. multiple to And and see to focused awards, start in show and of when contract basically car throughout it really trying to electrification you the on SOP continue we’re basically revenue are the their digital increase models as those expending the they everything brands be and component get So be pipeline chassis is up to launch. as companies on

value if you and global does face of Thanks to sort the could face intangible changes? mean, a goes you tax that rate have what it where value, at question, lot. take just Akash, the goes second go obviously these XX% statutory just what goes think at to guess if through rate tax that I low – you and the income with to I rate your tax rate? so, if do a as handicapped XX%,

various of it’s proposals plays right? kind that We’re early at the have to to so, it talking Well, looking out, how mean, I obviously see honestly – been made.

doing make is a favorable. one D.C. with we’re very educating and lot to for you R&D who of I them there strong have competitive, folks to sure have you U.S. companies the domestic reason a in high us outlined. is that to other extreme think more companies especially proposals proposal is really invest and really Qualcomm towards R&D There’s continue in working bias at this that What most So U.S. kind really really point are remains important thing a for like investments. on

us So but allow is us to proposals to just that’s been missing some more yet, doesn’t we’re get our There give allows that focus. – really question the in answer this hopeful soon. you clarity details we’ll a right

you. Thank

is question coming next from of proceed question. Our the with with line C.J. Muse your Evercore. Please

can result of concentrated front? is handsets you the headwind supply Thank sense a as are or QCT on afternoon. the be that’s curious taking you I’d a for first question. the guess good also adjacency it give primarily for revenue of in if seeing question, you I what constraints? Yes,

Yes, C.J., revenue so the sized not headwinds we’ve QCT. within really

But something data our is it vectors. have all of We point. shared that impacting is not that

year, for end, we resolve better automotive. the supply And much opportunity of right? as are that IoT, better of very a we end number, in a to us offering. the and are RF think front- not the issues these So grow look situation, be And been of a off versus as we So we’ll forward, us. able we we this and tailwind towards much could into have things into perfect front it’s the as just is stretching supply significant but also handsets we – would in results

That’s helpful.

on QCT Is is that RF XXXX, Near the it half into combined growing follow-up, right fiscal together about? question my term for the adjacency XX% the of picture looks flat be like that kind of could two-part Thank do framework guess business. put should that I what be you’ve in bigger we XX%, of such thinking year-on-year. that in can the seasonal IoT the and you year, the handsets? auto business then first given As you. June, excluding your side decline offset business think front-end And

pretty billion the direct on third forecast we a would so the Yes, range. said quarter. it C.J., for in IoT be We $X.X number gave fiscal

a pretty quarter a that just trends then that’s Similar how reported just auto to So $X.X and to growth grow. from $X.X in continues We sequential well. billion billion good billion. indication of with $X.X business as

a to is portfolio really look this across see has we similar growth trend. we business forward, as board, strong that So the and a vectors continue

you. Thank

with coming Research. Please question final Simpson your proceed Brett Our question. from with Arete is

into supply could can calendar the second and in getting it of be first at And saw looking similar wanted first you. particularly factoring second see, be ask the bit and the a the dynamic I particularly calendar half Android that half look in to year second little you and share maybe seasonality of more very half half to half the us you much much. the the the second about December about QCT you in you’re we of Should thanks Yes, the sort year, maybe – today talking half half Thank that year, and you then seasonality. what quarter. supply just just in in market first to maybe with flagship XXXX? weaker see challenges that we

timeframe. outlined that in launches Yes, September earlier drivers clearly key starting happened so from of as second one half a I was perspective, kind of the flagship the

happen. as launches it all see board those And Snapdragon so well. across would the And across we do OEMs, as expect be seasonality across to XXX

and materializing that to it said supply to benefit especially will addressed from those large us looking as as allow extent So a forward those quarter, Cristiano into launches to gets launches.

like maybe at comment as you follow-up, And get as would you of and know see this you. COVID not used specifically Okay. Akash. you moment perspective the What XG outlook on rising smartphone you but see it’s ASPs? something ASPs I particularly just do year you sort your Can with just how – the next you sort Thanks. the maybe comment moment. year? into a that through to at and adoption of do on like smartphone how to, Thank go

the I specifics, said, of them reporting least some ASPs. results, that you’d high look customers at at those on you at see smartphone if the there’s while their our Well, tier, upward we disclose don’t premium mean, we some and bias as

tier customers’ XG through the is which benefits really that’s So first roll seeing our penetrating some the results. you’re and of in

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

his legacy, look As alongside hard than the and been on to the opportunity for we opportunity I’d as to I’m tenure. him work company. this amazing It and times an like grown by privilege to this have time thank ahead. was is him Steve’s part earnings call, leadership to the more last and be through diversified of building has Qualcomm. times take XX This forward for his a years and the to humbled good I