QUALCOMM (QCOM) 29 Jul 212021 Q3 Earnings call transcript

Ladies and gentlemen, thank you for standing by. Welcome to the Qualcomm Third 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, July 28, 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. ahead. Lopez-Hodoyan, please go

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

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

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

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

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

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

Mauricio, amazing you, part that virtually to good digital Thank never has Qualcomm. joining ingredients enable Thanks evident. and industry, seeing been economy. every of our transformation technologies need products time The for be technologies because essential is are This more afternoon, us today. across into and for We're and an everyone. demand cloud products

mobile. to continue in to expect and lead leading are We

in of business and strong diversification processing wearables, revenue intelligent our the XXXX, The home, quarter third cars, billion impact performance many the we Most positive addition, importantly, realize revenues tablets, of of our front-end by In the and to expect fiscal and PCs the on guidance. to share strategy. year strategy. in This across the validating is revenue and led in factories, the high-end automotive we're approximately RF also in XR, next-generation revenues track our foundation and $XX more. smart edge of has a lead to transforming combined diversification connectivity IoT, exceeded evolution are per the that earnings fiscal financial connected enterprise,

video now growing processing of continued with economy. warehousing, of demand is such base and by foundation The we're In the logistics, strategy the are broadband driven to mobile emerging of purpose-built and for retail, and upgrade as smart edge X momentum industrial, in driven edge we strong networking, enterprise another by consumer, transformation enterprise you some categories, in XG both with consumer additional return seeing provide XR for cloud our product connectivity and our a product great and such demand, adoption cycle In me rapid devices. driven the Let demand details. quarter, electronics workplace. wearables. by In as the more. growth had IoT We're transportation and XG second wave also verticals, and cameras, WiFi this home for key increased offerings of collaboration, seeing

this at making industrial a ecosystem applications also are of for XG forefront reality. enabling the We new and

choice. of edge the are becoming partner We connected intelligent

customers. global win over demand annualized our solutions quarter reached automotive revenue revenue Tier for reflects automotive across our $XX rate automotive approximately pleased and that we're run And automakers third billion. results, on design pipeline As is increase, our based traction report continued This now to billion. X has $X

of experience the vehicle solutions, cockpit at automotive or in-car Our key intersection telematics the continue transformation connected growth and of as trends, such connectivity and platforms, and of vehicles, C-VXX the automotive electrification. digital industry the

continued RF industry. growth technology as track the become we the automakers, smartphone we by are partner chasses well-positioned become front-end, As one of the RF leading on the revenue. for of largest we remain most believe digital to important In assets a front-end for supplier

across leadership technology have to to front-end expect performance. lead system handset virtually while we RF in all forward, continue modem-to-antenna components, Looking

will update handset two revenues. an Now, drivers provide for key on I

impacted in addressable to changing growth continue opportunity. resulting we positively First, XG handset by be in the expansion the and OEM of our landscape

Our win shown during traction experiences. to traction Series than Snapdragon momentum. last mobile X platforms have design mobile design of devices design or wins on our smartphone Android and high-tier Snapdragon using with our We're shipped significant are XX solutions in Based of remain XG increased More premium new our X revenues. seeing nearly quarter-over-quarter. customers, also our Series growing date alone. win we confidence than more Series our total Snapdragon X wins mobile increased flagship this and have synonymous, and announced platforms, XXX our for with half performance handset strong XX% with Snapdragon quarter design

Second, several fiscal of of We're materially year. first multi-sourcing from is our supply QX, improve the and was and global G, supply Snapdragon in shipping calendar in we're with time to end chain. and the track of the volume. still products the the allocation our both by incremental making initiatives, XXX In capacity securing also mature multi-sourcing record We're across on products now optimizing commercialized our initiatives. the progress across leading nodes

results and our stability like of be us navigate supply the of products our challenging I environment. licensing customers business, from initiatives months. multi-sourcing portfolio commercialized our our will in quarter would to program. third strength thank Additional and employees, reflect our the patent for our our licensing our coming the In suppliers, helping the

IP from license XG up global agreements than to at more signed with a last XXX date, leader than XG one-third quarter. more are We

XG. XG across multiple over Akash. generations prior And continued develop than a like turn to its have call essential the patent innovations lifecycle longer to broad We to application expect due releases industries. new now I would and to future for we of

Thank you, good Cristiano and everyone. afternoon,

to and XG another a environment, on diversification, We are revenue to our priorities, continue leverage. report pleased including execute exceptional in challenging as adoption, operating we quarter

of major margin were the and of year adoption revenues more non-GAAP These billion in doubling reflect results strength all above of devices across of increase non-GAAP a by XX% and guidance, on quarter high-end QCT and recovery grew of of driven of strength QTL revenue tripled OEMs. our revenues of handset accounted driven versus Combined EBT and partial and XX% ago about revenues stronger third times year-over-year the EBT results $X within from a than for to broad high-tier the EPS guidance. EPS Handset Our revenues $X.X $X.XX. revenues above XX% of of than our guidance. products on revenues quarter $X.X of by QTL, RF XX% customer including RF the XX% margins and year-over-year doubled ago non-GAAP EBT premium impact and product by period. year in COVID the approximately billion, were front-end, increased of India. and of results high-end year-over-year. with XG mix expected midpoint of a billion, units in our of nearly revenues XX revenues year-over-year traction. QCT XX% front-end and expansion. QCT China $X.X offset billion margins impact than points EBT than of the faster These portfolio the X.X of $X.X and lower were the revenues across $XXX period growth our of IoT reflect the more and automotive million of billion total in

and IoT wave our year-over-year billion, and from of of include guidance. adoption excludes antenna $XXX RF modules, edge expansion a $X.X consumer demand was million transceivers. of grew As approximately on driven RF an to revenue revenues revenues front-end power grew trackers, $XXX cars and amplifiers, tuners, Automotive The platforms. reminder, versus industrial digital outperformance of connected XX% networking millimeter increase by the filters, million diversity across revenues year-over-year and revenues. cockpit XX%

puts Day. Our increasing win outlined to on design XXXX us target exceed pipeline track revenue last that now Investor the

for and fourth fiscal Turning to quarter. our units guidance handset

XXXX, for XG, our XXX handsets, handsets. growth for high XG maintaining including calendar XXX we're forecast For digit million XG, XG to single global

At regions developed the high-end towards billion device of of EBT XX%. fourth $X.XX strong growth implies strength and QCT, XX% a of forecast. fiscal expect and $X.X of our In dollar of revenues $X.X margins growth are we $X.X this of In XX% we have of year-over-year bias to EBT to The adoption revenue forecasting XXX%. billion $X billion margins of our of to of the expect Given midpoint, revenues reflects EPS forecast the the QTL, XX% QCT and and billion EBT of operating in and China, XG In $X.XX. to non-GAAP mobile and XG quarter, streams, high-tier we automotive. to to XX%. benefit including launches billion growth $X.XX leverage we revenues technology from sequential $X.XX billion extending our and in premium across across all revenue IoT investments and

metrics for quarter non-GAAP to some to midpoint XXXX. we and would the like X% key emphasize Lastly, Based on sequentially. of combined X% anticipate expenses to fourth SG&A guidance, I grow our fiscal R&D

expect expect Within year-over-year XX% relative non-GAAP XX% XXXX to $X.XX, $XX EPS fiscal automotive in of from to fiscal With in IoT to billion we expansion $XX billion in revenue revenues diversification, of our to doubling growth and billion XXXX. We combined front-end, and fiscal XXXX. RF nearly operating fiscal focus fiscal XXXX. margin from in we're continued XXXX grow $X forecasting on QCT,

pipeline, We and traction. strong expect a customer design increased to exit the with product roadmap, expanded fiscal year win

prepared my I'd highlight remarks, I Before to finished couple like items. a

greenhouse ESG Diego for our we gas will significantly purchasing headquarters, ongoing San recently renewable XXX% As which part efforts, annual our our energy solar of started reduce emissions.

an New our on on York the XXth, hosting back long-term update financial we Thank strategy in Lastly, provide our call outlook. I'll we'll you. be November Investor Mauricio. and will to Day turn now And where

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

Instructions] Please line your with coming Genuity. [Operator Our with question. you. proceed Mike first the from is Walkley Thank Canaccord question of

strong Great. Thank the you. Congratulations on results.

focus QCT Just wanted on to margins. the

your EBT now to takes model, is you, Did XX% back as and that lower that guidance if estimates, Could and to While guidance are what expedited might provide with margins time? it it's puts the a some above margins your that at and a adversely any XX% of is Apple maybe came over not, think or quarter, supply seemingly a it or constraints guiding floor And impact move shipments? all? the June sequentially. Akash, good in softer in

when the our year, for at look in were seen way we you thanks operating Mike, the expansion we've happy revenue operating performance pretty Sure. the growth. the leverage with question. with margin Really

of fourth so in midpoint XX% a forecasting then came revenue higher then, largely guidance If we XX%. of at in on now strong quarter, look And had coming the third and a performance well. happened the the gross of in midpoint quarter. we and as in what you fiscal strength at XX% that's margin are We

about when for optimize really R&D two. we those to us our and think the is you So, it, and scale margins investments, plan around revenue forward, trick going really

we as as from a very to exit opportunity investments win in it, feel we're we our to to we margins. in grow revenues. position expand mentioned we And the perspective prepared strong like design continue operating an As optimize remarks, we have year, fiscal a against think our to I continue

Okay. just Thanks. for my for And maybe follow-up, Cristiano.

the on year-over-year impressive focusing IoT XX% growth. Just business, the

the business You today XG, going this how business? in XG think what's you're to about to what say of business this growing much and the for analysts should terms a how the today, we maybe reasonable for could of do IoT CAGR -- is and but

That's question. Thanks of excited number a a We're great reasons. for Mike. very about business this

First see which digital There's is, growth an And what to is industrial. consumer, lot of we our how growth one this highly a trends, rates has Qualcomm. not only we a based It provide IoT higher about largest very to opportunity has details we networking it think transformation. segment. things are business then and of all SAM has for secular going rates expansion accelerated in it the it diversified. in Day. handsets. about is has It really is is diversified our is It more and of growth Analyst lot And

operating I are more rate, outlined -- accretive the create margins leverage. non-handset and is Akash times X.X but also growth to think to

but we're with right what very we see So, about more, now. stay happy tuned for IoT

you. Thank

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

matter end supply? And Thank or December upside compared then big expectations. some Yes. Because farther of about does can coming constraints of quarter You the to in a getting for Was talked supply that in. guess about into quarter, us come getting status out benefit know the about as a you. if Good talk constraints were of supply. what talk the you the Does your more generated the first question, those the additional to afternoon. you where that time? concern year? I I could the supply in supply going it

Chris. Akash. Hey, It's

and So, both your to me to let can try add Cristiano answer of it. I'm questions comments sure

trade and really was We midpoint stronger a a fiscal on really in slightly by came in than with at was For India driven guidance of especially QTL, which product China, the and various our quarter, stronger QCT. come you -- off low was most XG know, the in by lower $X.XX. tier, offset the third as slightly $X.XX units We mix, but between regions. in just did upside

So that helped us.

Going the quarter the we about really different that all across is saw strength really saw growth we over liked what to QCT, in streams. we revenue the

but not and also a IoT given. product auto. the million we on And IoT guidance helped than $XXX RF we within as And revenue we that, mix, just discussed handsets, So, front-end it's higher stronger mix upside, the and that us. just side, significant had had

quarter. performance. the I'll We're well. happy then So last margin gross in margin gross the And pretty as maybe the that is helped with thing highlight performance

key of those all it. So, kind to factors that contributed were the

place previously suppliers planned what the use we expect Cristiano's by the capacity and improve available drivers. as seeing months. across the several the of two a last the builds supply, we supply said second well. of with online really provided put with our seeing the continue really, in will combination to over We're benefit then as the initiatives that materially of towards And of capacity that year. we prepared last And the some time, as We're it's consistent is we end that we've year can foundries. remarks, Turning end of to that comes over multi-sourcing

are we that's us. have So discussed in of helping those both initiatives and play that previously

we'd we a and have product, recently up. coming The commercialized of multi-sourcing more couple our first one

of -- quarter the in guide. So, of that's initiatives more in even quarter those And you're really benefits seeing our the some September guide. see we'll benefit December

outpacing material end you Cristiano. to our thing like across we look both still And every -- quarter, is we news. it's in right as the only see would We guidance. of more have revenue of of we with statement business business. exceeding our is, in overall, to the made guide And the that's all see supply all improvement this And our the We're results, add of a continue year. in in great the demand supply. EPS, demand single -- next I up and but we having spite supply strong by to consistent And have Chris, and outpacing Qualcomm supply. end that demand great

Thank you. That’s very helpful.

the to on wanted has And address I follow-up, my For of expressed that that's the to And own concerns give to modem opportunity working also you address at the it. one modems. investor socket Apple. their Apple of they're course,

you that wanted concern So it's you're Qualcomm? limited magnitude what hear -- could if would about say mean that guess it. take to that's a that, perhaps perhaps I it say limited but investors. can you on you risk, in on I know that to And talk I for path, what to if what could getting of were Apple Apple, the

what you and answers question. follow-up Qualcomm. Two from not you for any expect for your would Thanks different than

with very on just with yes, Apple. phone. their I first the we're very first relationship happy think, one, We're

phones have the end go way happy to it, with day, Qualcomm. think of other should At things the always are very we're We the you progressing. of and

Qualcomm relevant, We in place have continued as with be long focused generation technology, on really a to this as to seller the for been of going modem be always always and wireless there's business. every first new

the the right second that to most concerns happening address the important I now. mobile the the and biggest opportunity part are of in answer, is Qualcomm mobile is think investor opportunity The landscape which for in is an changes

it's and market be two for growth create we than drivers at faster the share And shifts incredible super platform. premium synonymous go Android award opportunity, strategy quarter for Xiaomi As to forward. opportunity and with value in an That now became we shipments. us. the the Snapdragon earnings, this and are OEM executing going opportunity this key going the the matter a in Qualcomm the number is market incredible OEM handset on and Snapdragon of high-tier. of see is of fact, looking how to on and going of and We're focused one revenue whole

Thank you.

next of question from Chatterjee with your JP line with Please Morgan. the coming Our Samik proceed is question.

on Hi. Hi, Good the Hi, Cristiano. Akash. Congrats results. afternoon.

Just sound and results RF the of side to the targeting Does on I RF -- progress track, like here -- you're on maybe off one and really wanted RF there. become start great the largest on to suppliers.

and know you where And what's stand you but do more the annually, can if Just into confidence pole on period a driving update. the particularly the incumbents update I of that us more in some an relative then terms wins design in And to of what's you there? give go of to position well. share as conference of follow-up heavy it here, that I you market. driving getting launches, about have as

front-end It’s the us Akash. question. for point on Thanks Overall, Hey, for Samik. is, right side, portfolio. your RF product the obviously starting always having the

over so, are three the place. and we very in the we've breadth portfolio the been And a in of investing years, last good

product as forward, competitive I RF the in modem you solutions, also look but think, like leaders very a to we're system only within We front-end. feel in are strong RF not position. the and each individual end-to-end we component

The in front win us. we just design that second pipeline is of have the

relationships have the OEMs great in mobile with We the industry.

solution relationship for that then them. so extends And providing into end-to-end an

we expands And in opportunity in forward. we the OEMs we look the commitments very for we that scale, at And within take have within we RF we like it our the upward feel how but us when scale largest going also the take and an terms handsets, feel while so, from the as forward is player And outside grow based look have finally, in maybe to then the handsets industry and handsets, we designs, we're already on position grow trajectory we continue other to areas. really XG as do on the of outside, conversations in in our front-end. confident

you For think handsets, more about really And what's follow-up, growth TAM about just term next phones, talked my and about we Akash, it that's context, billion the that competitive the should that year, a and is into in here increase you and talk can evolving? in the you or on products MediaTek bit there $XX the get it longer primary Is still kind about? content of talked you've more thinking as how driver XG landscape Huawei is? how

Yeah.

it. first address XG. answer address I'll think Cristiano the Overall, the of and competitive part right? maybe can So is MediaTek your long within well. above, We're we transition at that the opportunities on see landscape. then ways still previously all go to still And the the I as rest have question think a X.X we clearly revenue tiers we're gave We And margin of front-end to the going happens, over metric to holds. the the X of of that multiplier a and our as

then give three to the high-tier. in In portfolio addition into you significantly phones One us. and us they are XXX our as the to that, fiscal a winning phone, is customers design high-tiers, that a is with launching with data in point benefiting to especially that product two XXXX. grow Maybe move on positions that and quick of Snapdragon and our combine in premium-tier process the with as we Honor, as within you're And commitments share. XG happens, OEM our when changing landscape premium us customers, seeing the from

And just customer our of example so, how we are an it's expanding base.

Hi, Samik.

of us talk half roadmap, a we have Snapdragon other for growth we wins commitments by The and is of XXX a Qualcomm, premium and design only designs I'll Qualcomm. answer, quarter-over-quarter, high-tier in to all X is customer strong have really simple about the changing there's the Akash, wins, that think for landscape. total to not but give and XX% design in Series. MediaTek, for total Snapdragon design not but we increased XG for metrics. One companies for opportunities plenty for outlined for What really couple important So,

we majority that revenue So we can the year-over-year. handset, handset segment the up about X opportunity know premium value at about XX%. the of it's up upside a talk of the lot of where -- look into but capture I Qualcomm growth QX, handset handsets clear -- the XXXX high, a billion indication we And market. growth and

indication business, that see growth we clear the this that executing we'll that's into the We with devices. opportunities new position. we're continue handset largest of have TAM to a So and a as in good one premium and be for the high-tier

you. Thank

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

Hi, basis that grew one. question a you I in guys. first Thanks dropping QCT my this equation guess XX you your gross letting a of ask the impressive sequentially, wanted Akash. I on margin despite question. me for margins guys gross to to your is mix. It's ask the side points

more I wanted more little into margin markets forward, going to the the getting position range market, that you driving a would structurally in gross have in mid-fifties a you're of peers what's to a So, structurally importantly, aligned gross And reside. you upside there guys just about keep currently fabless into of the new bit lot your margin get where entering the quarter. in the given [ph] is even anything that kind from

for Ross. your Thanks Yeah. Hey, question.

gross combination of is happy of said a a just on with couple earlier, think a how stronger margins. the As we did mix really having I things. It's One products. I pretty of

margins. we more as and dollar so, And in percent of addition our high-tier, profile that adoption solutions to premium the at helps our margin see gross

of help gross areas, really second grow at the profile. the it The margin mix IoT, automotive gross is second and leads into and level as other is that margin into our your is growth businesses -- we helps point margin these profile

forward, us for factor noted. as rightly And going that's so, you key a

it's premium side, timing for for supply should minuses gross I from Huawei, mid-fifties China launches, the different have how whether the I the board. coming my for guess Honor, overall. that pluses separately, yeah, think follow-up And margin fourth have question color. Great. should the of not the clarified just be ecosystem Thanks as on of new you But that QCT calendar or Cristiano dynamics, a and would lot we launches quarter, Akash,

really a different make that be of lot out window. seasonality could thrown the just So historical puts takes and

any just and helpful. directional there sort would those So, takes color on of even puts be

Sure.

the two QTL, know, you seasonally the said strong quarter well, the Within a to me that company quarter quickly businesses. range. And we it's hit be expect holiday overall. we've as let maybe in $X.X So, just past around billion for the

So, not points. point different at we're separate give anything point this seeing to this data at

the side, to On of be our seasonality we the QCT expect a favorable thing businesses. for all

not auto. but So handsets, just RF IoT front-end, and

And this some benefit. a the reminder year, in mind well. normal reasons have sequential time. and of see would launch December typical so, a quarter. increase from new seasonal during we thing The Within and as the improvements handsets, And the time, a keep higher as we're from that not two last we one the getting to was high-tier, of September picture to in that into benefit we'll then, that obviously handsets coming happened had than supply that premium obviously especially because

First back customer coming is as to a Qualcomm. Apple

phone And there in a then so seasonality. And also, delay exaggerated that was their the launch.

key those factors. So, are two

If you imply be would be this year, not that -- would to factors last compare year. that'd

you. Thank

coming Barclays. is question. Blayne proceed question from next Please the Curtis with of line Our your with

the appreciate released. business. detail broad IoT my Hey, question good the on business very Obviously, afternoon. Thanks a you taking that and for

the you lot I nearly out. the by seen it since there. in So I'm wondering to strength, you've in sub-segments know segments of obviously breaking started the doubled know where way can three pretty I diverse. if maybe there's any business and a it it's you dial

-- the strength? I how was just segments, the these as where answer So, seeing you would curious, you most within to are question

Yeah. Akash. it's Blayne,

that. Let me crack take at a

business at -- to look $X.X you If were I And grow billion IoT mentioned position billion. the revenue we're that as somewhere we stream. to March. this range feel in year, $X.X for to in our earlier, continue grew strong We in range like a we happened what revenue

the down to those we buckets. edge trends and broke down in three dominant interesting pretty us. category. break Neither are the industrial. you it business consumer of referring slide networking, for you're So, We When and in had

strong three really total the they’re fixed a having point very So, of XG business to both wireless XG fixed networking, all materially revenue. the for couple at contributing for very us. material business, Within think I'll And that of you edge access of the we're Maybe impact highlight should the think about of the and as amount WiFi very when us. very wireless both especially you business, front-end things.

in So, we're offers the field opportunity is the material very us a over that next-generation are on look innings the not looking have. we and broad PCs -- several the market. really growth clearly forward, things very as to going within could very business, growth that that set next to the In AR/VR But consumer are even growth also forward. several be The first forward split broad within drivers you is and products of the material revenue there years. that And between then we products. industrial, that’s a then

looking us. excited us. And to we're all ways are for long for So, go technologies markets from these

Thank you.

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

going to some own much. your very that growing question first you guess, inventory from what are depleted Good track go goes into back to trying you into. as Thank is outlined been I customers kind MediaTek the is of We've TAM, all Huawei has and billion my $XX business that now Yeah. constraints. yourselves supply are Huawei and afternoon. to their exiting guys and again

fiscal there still go just in TAM ahead into much about XXXX? you is realistically can how TAM, $XX for of you that guys of you, you much that as that’s you address of the out think do ballpark And So, billion September Thanks. how quarter?

Thanks Matt for that question.

confidence at I September us kind think supply from the our away this that really is of have stay them of year. of OEMs, we the quarter, that really we gives designs, it conversations tailwind for opportunity get but forward. kind a a portion we from level going is end into commitments will What precision on breaking XXXX with improvements big in fiscal that will don’t that get our us estimating in of and will the TAM. the the of going We down

And so, play as XXXX. those are that fiscal we the go our into three kind into factors of confidence

on And guys growing I and to wanted seems and positioned fulcrum, are right as to my competitive I really a those Thanks. question, if ability including for guess, your then integrated WiFi, it. Thanks. guys solution the Qualcomm across you the envisioning Got as business, the that automotive the with you now. XG connectivity what's that have cetera, GPS, like about being it integrated et follow-up, pipeline for it Bluetooth, display, sell Cristiano in-dash same would RF? ask And of sockets you an a as do ASPs kind well platform. talked landscape business, on what

for the cloud. Thanks in especially we Look, the where of the because space, within box the question. position car to like you can communications trends the step connecting to do this the It’s the really the Matt connect our telematics or just first in car.

capabilities. You you to but WiFi, also Cellular-VXX outlined, can Bluetooth add that as

So, a long roadmap.

understanding a strong a the and I solution. ability modular very we provide position given have of market, the very our think to

for revenue, becoming wins. see really the and richer more you're Also, space, our is much showing starting material to think, the I opportunity which digital really we're highly it's in a based silicon design cockpit differentiated in on us.

heads I the smart will car in-car we absolute RFPs. the premium-tier of side And at is majority completely there entertainment, winning the is view a now mirrors, dashboard, redesign so forth. today, look As argue seat mirrors experience. Qualcomm and rear smart infotainment, of display, up

together. highly engaged take differentiated the those with of XX systems a system are space all XX in we We also because brands, approach can connecting the different

digital have automotive as company domains multiple we to we a You chassis than to build. because should and about have to business, automotive magnitude are capabilities going our thinking be it's start across reflect in And are pipeline. our contracted differentiated, the will there starting of

you. Thank

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

is ambition end EBIT sort off EBIT EBIT And is we what's some trade those there shortages Or Great. that active your off share can or just supply certain through, it of wonder margin of thinking achieve to between Thank in trade an margin, to you. kind how process certain lost? a of of that retake chain an I how affects is things? margin there some of and you -- share, that kind are And maybe two tightness XX% market a and QCT. approaching the we that? the of

Joe, Akash. it's

Our things. of handsets outlined premium margins It's really last the Day between way from is a that a high-tiers we in is gross is framework that unchanged then Analyst to margin way versus optimizing two outside, scale and where we on of maybe combination so it And year. attractive It's are the gross is technology point diversification mobile. growth and lower-tiers. the lot from that the the is the coming highlight combination of on the at auto second margins do The really a the lot in funds and focusing more margins I'd mix the adds next IoT profile.

the get course, balancing were position allows mobile long of So, things making operating then, us continue to that that in technology investments being us areas benefit R&D in right to we're And we planning in and investing sure win in leverage scale the the and large that these we reused to very with really is term. for. are areas that these in exciting

it's combination a of factors. So, those

you. Thank Great.

Thank you.

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

wanted you risen, if quarter. this wonder could bit. was of little a the tell question. to you I it it said, quarter wave indicate a for and I to into did rise expect Thanks be continue for dig Last you? that follow-up. RFFE then revenues. question, That’s you that do to millimeter you mean, able And us it’s year, my first expect year to end XX% the then, to where the Hi. about I if was you might have calendar assuming Yeah. I what whether continue.

as the different range. that When I'll than will of millimeter you it quarter add front-end, so become total and Hi, following quarter be larger very in Yeah. last long-term It's the year, pretty to it top of this on percent Cristiano growth you into it. that we percent a the then defer for expect deployed, within pie. it going revenue, wave gets next about to a think RF year vector similar give color was I'll on of and RFFE a to not From Rod. metric Akash. total

expectations millimeter Asian, Rod, There in world are here the Southeast they Everything are second Europe, United Germany. technology. Western XXX some countries well. recent during over networks, the is commercial indicated carriers MWC your States, investing question, on show, and Russia, and wave South Japan, And as in is the one Barcelona, upcoming trade around tracking. millimeter the part wave of aligned is Korea, Singapore. Italy how The

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Great.

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Rod, Akash. it's Yeah.

of as quarter China expectations A relative we lot saw low-tier. I in mentioned within some think, at weakness my in and your I prepared to India. the the in the did we was remarks, see weakness

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Thank you.

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

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Thank you.

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

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you. Thank

final Our coming your question is of Please the line with with proceed Srini Pajjuri SMBC. from question.

clarification and Thank a you. question. I have a

X% RF and of RF handset you handsets I Historically, declined quarter But move I've grew or kind Akash. X% X%. think seen about and this hand-in-hand. the First, X%, the the or reported, RF about in on quarter that business

to trying discrepancy? understand explains that what Just

timing Srini. within various couple for There One Hi, are our things will see purchase in you Yeah. portfolio. reasons. differences of is, some

attach Qualcomm components So, sometimes that you of a a handset, then second do our for things. Qualcomm so specific timing that is RF While as baseband, are are outside tied business not baseband. we to And thought see business largely have wins, right? an these sometimes purchased RF earlier of design explicitly impacts difference is

So, factor. we different do attach that also a to other devices so and becomes

And $X.X the should be quarter. peak then you think QX, rate in the the for it. I billion the about QTL run side, on Got said

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adapting the some And are XG. adjacencies of

or end or So, are adjacencies. we growth mid growth I here. drivers? talk or as a it's into their next bit two, some seeing potential as you. I'm you just end mean, adapting can more Thank of curious year pronounced in low not XG, about to look of some the whether we why smartphones

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project handsets are for of we is it few to the upside as are those So, think number on an that outside could top get drive factor. of but to to The things opportunities. growth reasonable forward data again business. that, points a licensing There upside annual

for we're positive I seeing mix call, in us. a as the is, very that's mentioned earlier shift, Second

see the And also in so, continues, will QTL. QCT, in we'll the shift as benefit mix we but benefit see

upside And tiers, better lower the ASPs a a revenues. QTL penetrating it XG driver result be with would another and better as well. as through And will especially show be there factor up and again, for so that would

in forward the for it. helps hopefully framing So, that path

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

results. who staying Thanks and leading everyone on building and for to today. like the to in call strategy. of XG to thank say would diversification I Once joining our again, employees I Qualcomm, us look focused our are on leading the delivering forward you success

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

You disconnect. may now