QUALCOMM (QCOM) 2 Feb 232023 Q1 Earnings call transcript

Ladies and gentlemen, thank you for standing by. Welcome to the Qualcomm First Quarter Fiscal 2023 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded, February 2, 2023. The playback number for today’s call is 877-660-6853. International callers, please dial 201-612-7415. is number reservation playback XXXXXXXX. The

like I to please the over turn Lopez-Hodoyan, would go Vice Lopez-Hodoyan, now Mauricio Mr. President call Relations. to of ahead. Investor

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

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

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

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

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

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

And President now, and Amon. to Cristiano Officer, comments Chief Executive from Qualcomm’s

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

in per headwinds including fiscal semiconductor reflecting and as short-term the $X.XX despite earnings of ongoing and IoT and revenues demand QX, Automotive QCT year-over-year billion billion QCT we IoT. progress revenues macroeconomic In $X.X of delivered challenges industry, $X.X impacting were growth weaker revenues revenue quarter, down In total on year-over-year combined in of non-GAAP auto the share, represent revenues, a handset the QCT of result continued XX% diversification. and of current inventory drawdown. XX%

QX. billion delivered in $X.X QTL within revenues

levels first of now least we the calendar ‘XX. expecting to continues industry to As half the handset demand, reduced through are elevated at inventory persist channel experience

and industries also In within elevated IoT demand are addition, levels. multiple inventory weaker-than-expected experiencing end

spending streamlining actively Combined X% our diversification by growth reductions run call. is Given macroeconomic exiting taken we to without have last further with operating ahead. sight expenses already of we’re expenses the quarter, significant actions our opportunities to in manage with fiscal commitment and demand operations during to approximately and earnings a the losing the and the relative This operating implementing indicated as current expect environment, non-GAAP we ‘XX. consistent rate reduce

unchanged. long-term our growth headwinds, opportunities remain near-term Despite

Our as compute low-power ongoing enabling and connectivity; of leading intelligence across advanced wireless digital technologies, such high-performance, the on-device transformation industries. trends are

position From technology a believe product and history. we are in strongest the we in our perspective,

the working, Qualcomm firmly in focused expanding billion and Our is our market decade connected the and strategy addressable as we establishing remain to approximately intelligent next edge. company for the on processor $XXX

key highlights from our across I provide will business. now

at software-defined the and well CES, now the automated scale Tier this single Ride digital purpose-built for compute by a an is of innovation safety enables and the automotive, security the industry opportunity continues their digital Xs the to systems center driver a advanced Flex, on automotive vehicle and to generation At cockpit, which announced driving Automakers industry. SoC, drive help vehicles. of Snapdragon preferred can platform a next assistance portfolio. the we architecture functions coexist across to vehicle In to unified for believe first evolve unprecedented Snapdragon core business industry’s is software-defined as of levels as increased features, of The autonomy connectivity, automakers Chassis offering and at new a and significant transformation, driven We the deliver models enhanced this streams. rate, Digital improved technologies. adoption revenue

connected with enhance and riders. personal We more latest services the into a cloud and digital safety infotainment experience two-wheelers expansion also demonstrated our for to deliver

fleet over-the-air providers to and services, diagnostics, theft Our deliver enable updates, solutions geofencing, subscription remote protection and OEMs also more.

that positioned into automotive, we this to We the and are the we of progress best are industry have future. help we in proud the partner very technology believe made drive

AI experiences accelerated platform our begins X includes that of Snapdragon for smartphones. semantic Gen our real-time enhance announced videos. first X can purpose dedicated recently for a mobile and processor AI-powered larger formats. photos and X Gen AI ever A for life XG updated XG enables engine new Snapdragon processor tensor latency camera data segmentation handsets, The In AI with an accelerator general that and a increased speeds, battery X coverage, era

connectivity Snapdragon X world’s also be XXXX. weather-resilient two-way the are utilizing Snapdragon to will second first within initially spectrum smartphones half will We pleased capable solution provide Iridium’s available smartphones. next-generation enable Satellite premium for L-band X the messaging satellite-based Gen and Android using messaging, of global on for

by mobile family expanded pleased was The platform SXX Samsung. Snapdragon and I for this Samsung’s launched accelerated possible the X smartphones, features X strategic partnership from globally. represents join powered the Gen made Galaxy our SXX to premium performance Galaxy first event, unique of platform smartphone Unpacked the by with partnership. Galaxy Yesterday, customizations where announced they This

our revenue IoT, our market, disruptive poised In internal engine In IoT, is across become categories: upgraded which spans largest our watt next-generation consumer, and Oryon custom with platform and to performance on industrial. PC per stream addressable integrated consumer delivering edge CPUs KPIs, has CPU AI time sampled three exceeding networking and our is across tiers.

native portrait Snapdragon’s leading noise voice for with CrowdStrike. as focus. unique on new engaged eye the Windows opens AnyConnect broadly for AI and pleased life are and app Prime market-leading differentiated capabilities Black, user Together been Cisco Key by framing modern Amazon and are experiences and Carbon Zoom, VMware Studio that Snapdragon have Effects, the possibilities Windows In Video, battery examples launched ISVs blur, with workforce. Microsoft, applications cancellation with ecosystem we’re including for addition, such

apps, run including on Lightroom, creativity Additionally, Photoshop, Acrobat Snapdragon. natively as Adobe announced suite Tech will its at Fresco and Adobe our of Summit,

road with wins consumer platform engaged maps for now commercial. multiple design OEMs and across PC major their with We’re product

our several and led carrier to and Wi-Fi Wi-Fi in infrastructure our products solutions. continue edge points networking IoT favorable enterprise share, We gain that In strength to Wi-Fi are see trends gateways. access networking by

enterprise home. relying on The chipsets hybrid work in networking in remote. or per on Wi-Fi number installed tools to grow regardless had mesh have workers of collaboration to are they networking continues worldwide, trend with the increasing of office real-time whether appears lasting impacts the popularity Wi-Fi

new a next-generation the carrier across to home X, to from providers home, enterprise software XE opportunities Wi-Fi leading Broadband and are which transition and creating in and model, modular development increasingly currently we’re Wi-Fi routers, gateway segments. X Qualcomm internet turning for service

XG, their wireless homes to access, FWA. the million In platforms. to enable and broadband XG small millimeter in compact auctions. Qualcomm portfolio ecosystem India in cell services following our India complemented leading fixed RF is infrastructure we’re cell XG to FWA positioned encouraged have by XG well by high-power macro CPEs stated on product with recent provide XG XXX the wave-based significant using modem the publicly momentum Operators ambition

spectrum. are on We millimeter rollout in the CPE India, and working with currently both and infrastructure sub-X spanning wave OEMs commercial

transformation while In we of logistics verticals In across believe industrial have manufacturing the early phases, the and is in a is and new we in scale IoT, the one partners. tracking of many the opportunity significant. announced consumption largest XX% for digital space, lower still optimized long Last term with the month, established Qualcomm we ecosystems design the for modules solutions. of and versus modem, meters, QCXXXX other the structure. generation such XX% home solution up trackers, to and up to an reduces the QCXXXX meters, IoT applications location-based also cost e-mobility, power by automation to as The utility parking previous security customers enabling smart

transition terminals. continue retail, from traditional In solutions to full-feature the terminals drive point-of-sale to Android-based our

excited over Snapdragon into enterprise shipped this such since desktops video growing XXXX many We OEMs These million terminals have collaboration, key are and Nit, point-of-sale leading Alibaba. accelerates. Logitech, XX AVer within Cisco, the segment, worldwide. about and powering traction the devices as our handheld we’re In of just we prospects Bose, rapidly remain [ph] of digital Poly, and growth as examples few a transformation industrial,

long-term for Qualcomm as device remains extends In summary, the to demand for every at unchanged technology the virtually opportunity overall edge. growth

diverse a markets. Our digital record and perspective the of transformation new at forefront the track be innovation across and provides capability to unique end of

I like now to the call would over to Akash. turn

you, and with quarter busy week. joining for And first I’ll afternoon, earnings you Thank our call good start a Cristiano, results. everyone. fiscal during our thank

revenues guidance of high $X.XX. units. revenues $X.XX impact margin QTL recorded reflecting and and with billion guidance, Consistent our $X.X industry-wide billion of of Handset delivered handset previously EBT our billion global the lower of communicated. were at non-GAAP $X.X revenues XX%. reflected we $X.X revenues of prior was of slightly had of QCT we EPS XX%, the billion margin headwinds and at range end EBT

we million, IoT certain expenses were networking than sequentially, edge quarter. includes driven revenues of billion, up $XXX X% were the last products. by the Automotive mainly our Non-GAAP Digital of with lower year-over-year our $X.X guidance, momentum Chassis. cost to which growth decreasing X% actions adoption year-over-year benefit Snapdragon of operating our driven to outlined XX% from its revenue growth continued by

and marketable cash fiscal $X.X Our end balance remains the at strong sheet of quarter. first billion in with securities the

sale the to business addition, receive price Veoneer’s billion the transaction of of SSW of In $X.X expect the by active on to of Magna Partners. we safety majority a completion

We expect of transaction to year. by the end the fiscal the close

billion line capital We in with in to program. our in $X.X stock $XXX stockholders, $X.X million dividends, repurchases including and returned billion return

included a our GAAP results. from benefit excluded expenses. the our capitalize tax to requirement from $X.XX is and R&D Lastly, EPS results non-GAAP benefit This U.S. amortize

fiscal challenging driving environment weakness. COVID facing headwinds in quarter semiconductor China, guidance, macroeconomic an to with the and Before to second be conditions provide demand The turning cyclical dynamic on I’ll short-term industry. continues headwinds update industry-wide

volumes the opportunity incorporating impact down for bias easing and to and draw expect quarters. it The least second for inventory ‘XX during products are third contributed Given continue that remain this in QCT this strong a a normalize the the we’re and broadening when handset At calendar may occurs. supply the on channel half Based we assessment, year, inventory. IoT at relative position to we and and to demand of weakness uncertainty, point, optimistic elevated our constraints fiscal has of advantage to customers we ‘XX. the XG channel current of second XG, on calendar demand XG, take across to handsets calendar negative through the inventory, of

environment, immune to is ability our While navigate business confident our this the to are landscape. in we macro not

reduce As beyond Cristiano the our summarized, outlined. we actions we initiatives expand have continued to expenses to previously operating

reduction to Overall, a the on rate. are of in is in diversification SG&A, X% consistent quarter fiscal actions and results handsets strategy are benefit IoT and and initial fiscal is for continue our we non-GAAP guidance. expenses we to our reducing our targeting combined exit The operating business. our automotive, ‘XX with investments in we second relative While these reflected spending long-term quarter first fund which

quarter. Turning fiscal for second to guidance the

forecasting of continued our channel are includes of midpoint inventory. and The lower market of guidance billion of billion to demand $X.XX. We the and an revenues $X.XX drawdown end to $X.X $X.X non-GAAP of assumption EPS

we estimate and We billion XX%. sequential of margins $X.XX units. billion seasonal $X.XX are billion of of to XX% handset QCT, to EBT billion revenues forecasting to of a in QTL XX% EBT reflecting margins XX%, and $X.X In decline $X to revenues

We factors savings expect be due reduction reflects operating handsets our non-GAAP and revenues year offset the a certain the outlined. We billion. actions. by IoT sequentially, the I for by just costs, automotive flat in estimate revenue This increases calendar of offset $X.XX expenses typical approximately to employee-related cost reduction to from

In operating the macro discipline with will the and managing environment, on the of focused uncertainty closing, control. remain we we factors

on design evidenced IoT strategy track, automotive win pipeline is and diversification Our across customers. our by as

In opportunity remains addition, our secular growth long-term unchanged.

map on on executing and by enabled road our technology are focused best-in-class portfolio. our product leading We strategy,

to Thank Mauricio. you, Back you.

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

question Chatterjee with of Samik [Operator Instructions] coming from is the JPMorgan. First line

high-end changes on year maybe handset that on you a of hear sort have color But market. is give that to of to concerns Maybe to those of pricing that of digestion? from related of digestion. new had other the inventory Thank strategy their can front for about you. a you outside some chips OEMs side if to terms prioritize have inventory Maybe and first of the or in achieve couple. I of I OEMs the in delay, handsets seeing their in terms they have the prioritize chips the on sort pricing this that strategies the us And they I any, intend the of want what you’re the maiden one plans investors follow-up. from for the of Android if one, the any then sort sort or sort in launch versus

the very at, Samik, our Qualcomm launch Really customers Sure. that continuing Akash. see in we’re launch a it’s time. especially on perspective, is handset strong to from tiers

So, obviously launch we -- saw yesterday. Samsung the happen you’re

their devices Our Chinese OEMs are launch also to planning schedule. on

from on in us. So, key no our the change tiers for perspective timing launch

Okay. for And maybe follow-up. just my

seeing worsening as India you edge into of mentioned more. Thank can industrial On what quantify delve being you’re IoT the or weakness And and seeing more how that IoT of edge networking about but -- networking Are if you you broader maybe side, you IoT, think across just can in in the sort the well? sort to that bit a if higher weakness that market, opportunity XXXX? to consumer on that relative is you. more

Sure.

So It’s really to it’s impact very is parts entire the the headwinds that short-term the other cyclical from similar perspective, an IoT industry. of seeing. industry

well. that We’re seeing a of as factor

it’s into so, a weakness and seeing IoT talked going driven about that’s And bit we’ve by design us. then we to inventory -- on. opportunity and within see both reflects two when it we’ve expand our these cyclicality those in still and obviously previously, these edge seeing factors look drawdown, It’s look that OEM product line, that we’re at you parts. similar demand are factors consumer the of started -- back handsets. of clearly impact in industrial step And that But, in short-term the of are networking. as industry kind and the front pipeline, our win But, we we seen at

XG is It’s be probably as said we add to the order one in opportunity XXX to you as will our opportunity wireless operators it’s about going of thing, Samik, connect opportunity. homes. of the This mentioned, one ask for we’re million about the the remarks, in likely We just And across be access. excited to Yes. that as all we largest India. -- fixed prepared Cristiano.

been significant. that utilized wave well What it wireless is like millimeter So, about fixed for has that could as access. very be we

So, that’s us. opportunity great for a

Cowen. next with question Our from Matt Ramsay is

I to a couple a ask bit question Akash, -- wanted little margins. about questions of of

margins dynamics inventory have through could some. us with go You you the correction? maybe margin about in different QCT the macro the Is maybe bit inventory March the walk from talked down but and on OpEx, how we margins a model we the come the might And pretty operating here. seeing explicitly takes segments and surprise as we’re that this should the in correction no bottom? be given mix just And the of puts of gross sort during Thanks. forward, QCT

Matt. Sure,

parts. So, in let it address two me

the and perspective, did the we quarter. second we better then, that first First, the margin guiding from into a quarter. gross results margins expectations fiscal announced slightly And than our we’re for similar

are we perspective, we’re environment from in well. good a So, doing job. holding challenging relatively a And margin even gross are the in, we

past, and As there’ll always was some we we’ve in the that expected to target. we long-term once get that into said supply be constraints, gross pressure, our margin factored

there’s nothing that haven’t you So, margin told we on before gross really new side.

On second in temporarily that in here inventory from impact is the the the leverage which is operating really the reduces drawdown seeing operating driver leverage, short business the the term. we’re

being of see operating of And step in But expectations. impacted kind you’re should back abstract line margins the the so, margin seeing with out by your and operating change, once you more that. you that

with Next Genuity. Canaccord question is Walkley Mike from

what’s to tier premium Android? have in take to well really go interest be high-tier done maybe that mid- Android, what the market? if has into with down to would to line so, maybe if time Qualcomm share the you while appetite in Cristiano, And supply easing,

the you, your mass the had our Thank What with as impacted, better current inventory little a it’s as think, bit have done Mike, tier drawdown, Actually, than great what the in seen tier we been actually, demand consistent question. for a environment has question. premium I well expectations. this

you of I well. customers’ some call that saw think our as earnings in

see that tier for situation year, good to China and come tiers see that those as we the we design an what However, traction reopens. will the the as get improves inventory our And the and happens. mid and half opportunity calendar in of is second the low expect back you to with the drawdown we as hope well OEMs, we’ll

second -- we’re So, planning better half in not we’re our that not assumptions. yet factoring

I think drawdown think the as optimism there’s just we’re But, reopening. of waiting. China I because as well inventory

Research. Stacy from question with Bernstein Rasgon next Our

two. have I

For the March the as June. in well first inventory one, talking Akash, about correction, as you’re

on do quarter sort June And in kind the wondering was the preliminary guiding think you I if is quarter I Like, flattish You’re in then, trajectory. follow-up. bottom? give handsets of March could there’s a us of general color guys March. you like have any

Yes.

Stacy, uncertainty we the out short-term seeing and headwinds, is of we’re seeing So, cyclical we’re things are about way, play and from remains, headwinds that the inventory perspective thinking kind handsets in both how that so that a demand IoT, drawdown. and

to visibility, cautious. more be until going with So, And QCT we be customers purchases careful they’re additional expect down is and our to inventory. draw there

guidance. factored So, updated that’s what’s our in

half allows the that when position advantage When our of inventory strong optimistic that the we point normalizes. that demand second said, channel look of to pretty year, and we’re on, occurs. as take from Cristiano growth at the the us dynamic given And

is quarters, bottom, impact there’s In going second we that an it about to think terms grow and the I point March the of think half the year. for of in see the as way on June we’re and opportunity from I

a quick in had feeling you you give Got used selling in follow-up. chip from see But overall for it. you us average overall could for the $XXX to If higher Q, how benefit price quarter, talked ask tailwind the been for that some In the number relative your handset about strictly I you handsets. million that year-over-year has and pricing in trending business Can a to QCT? segment. that you give was

Yes.

of So, pricing it’s the think if things. in about two business, handset a function you usually

being to side. on within more a device, the especially is capabilities First processor added year given application the

functionality. seen last from we over And for see the forward, look we that significantly And continuing us are benefit three additional as so, years. demand you’ve to

overall opportunity improvement tier for us industry. for tier for of kind the that’s So, and

course, second And and across changes peers mix quarters. factor within is then, that, of the

sells But is. on it quarter fundamental a kind through up growth. and that customer And versus so, which that’s of of goes and down in that more timing what revenue trend based

from next Seymore Our is with question Bank. Ross Deutsche

the think, on were that is being $X gave I sequentially. quarter that because So inventory on the want takes a halfway demand just that, wonder the dropped? of the for are the talk I has getting fiscal you getting now guidance issue billion just in through quarter, about last XQ flat I you just And focus just framework burn you you to helpful. flat? indeed and Akash, pervasive to puts be or and successful puts next handset would Can takes if about, headwind.

Yes, Ross.

perspective, quarter is in I handset what a assumed decline, in the a seasonal remarks my prepared standard this March. we’ve December March from and said So, into from

So, you expect once would go it’s happens you the what seasonally between quarters.

so, And what as well. that’s quarter the QTL our for that and informs we’ve assumed, forecast

But sequentially. guided you flat

So, down, burning it now December inventory? to except be March, be going saying to less trying just I’m to -- it’s would because from you flat are you’re for

Okay.

So I understand the confusion.

expecting to And with So, mix what also handset we which total down I seasonal of course, QCT was we to flat. the chips expect be -- a inventory of the we trend. that’s and drawdown are function quarter-over-quarter, was flat differences. said revenue, about What talked market, was of be consistent handset

from comes Moore Joe question with next The Morgan Stanley.

in Going of that? inventory is know give back What’s are you us reduction are much are sure I there you this customers in didn’t reducing anything -- back? that into coming can visibility a and of sense mean, to sort end And how certain demand? where Just they’re you you’re so they and handsets. inventory all take December not you your

sell-through the QCT. of because kind of sense a had with compare have the in have happening then what’s of we we to that And OEMs QTL Joe, business. ability our what Yes.

of industry. sense portion that we’re drawdown. in pretty is a the So, happening we have do was of good confident it inventory And large a what

specific world it is there in to you launches different China the Okay. right some the you March mentioned but terms than situation in of China the new Great. Like, think then the of challenging is pretty now? sounds quarter, like region, I the And visibility. rest for

being visibility, we customers’ and that of more we we purchases about with handset launches reflects customers extremely in on cadence talked down in Yes. expect on that’s seeing what purchases, our active and planning are the within be expect But there driving China market. the launches, inventory. The uncertainty still careful to draw and until terms we the definitely and is additional handset functionality OEMs regular in

This is Cristiano.

Let just one me add thing.

sales the sales, at big online majority look is you the China market. a of offline even component, market, majority have though handset If they the of

some the you expect impact there COVID gets of we situation, and is big are in OEMs COVID China, in announced which some And thinking have of as the conclusion. the for right behind the Common a handset to It’s is new as should draw saw, be up. with is lockdowns of was open China. visibility early -- to and we sense, Mobile and now So, have market how markets the to also World launches what our a a preparing it, that’s going lot the that device Congress. too at

to So, is there that let’s conversation optimism back be better. that go that could half second

Our Barclays. next Blayne Curtis question with from is

the kind on guess up of sheet, two. combination a inventories I’m Akash. your I balance of curious are

comment profitability you kind whether what half as going share? You are a end Cristiano, modem a that the of just having you I during moving on high pricing for versus I your need shortages, tough question, just curious, for share midrange. favoring of curious down What about guess is Thanks. to at business? well. well? prior And the in then then, work navigating thoughts as curious just thoughts? within kind your I’m of a and mean, the environment. is? job the to environment And good general did Can pricing the on about kind MediaTek just but first those back Just

one. second set on seeing our Sure. you’re customers on drivers. Blayne, an and what same it’s and sheet, the I’ll the our will think peers well, one, take balance seeing something similar Akash. Cristiano take perspective to From as inventory I then of the first you’re

is leading-edge X and lead for know to well, where for chip the you foundry the X now As which time production. nodes, is operate, months we

expectation wafers inventory starting a were before the we based so, market drawdown. on clearly and different And

that calibrated So, down. we’ve

a with are reasonable time, we’ll get and place. We to our suppliers working over

It today, is we’ve tremendously And revenue remember important and across has three to ago look scale up years our grown to demand. that when versus caught of terms also then you at also supply in businesses.

working increase But remaining we’ll So naturally those anyways. through, inventory I two as the factors mentioned. would be

Blayne, us clear, Hi other Look, probably and which chip the both it’s question. dealing second to the supplier Cristiano, the your take challenges, I’m handset in market, same is going with the demand also we and demand to is areas more saw low-tier, competition, that’s In weakness drawdown. inventory that the the have one mid- that’s we weakness. the which most impacted by

about So, market our as open we view from positioned a think perspective. well we’re up, is the competitive very

past visibility the years. have we consistent we into We And which remain is to behaved the pricing, design on how pipeline. have over will disciplined few

The next Arete line comes from with the of Research. Simpson Brett question

the can wanted And you maybe think And saw understand access? Qualcomm business talk that of do the for here maybe you plays next markets? you’ve Qualcomm? as the some years in can But see you in a start success couple in wireless Thank us couple that far bit help really had about you the India wireless you. you U.S. the a opportunity talked playing about how years you this Just ASPs access. the out gets to so attack how I remarks and of in in evolving other of and in see about access. maybe that a I fixed just device fixed-wireless over from big to opportunity with fixed the ask prepared the out next typical

market we saying start really will market, like I that market. think that a long-term and is by So, the we

find for the United and that outside it’s the fiber. time, And think to the States. have clear see don’t I now about can XG, augment that it’s first wireless really home you -- everywhere solution fiber broadband, you cable a

really that we very And about that’s while if economies. why the to ASP, auctions. think we lot I accretive millimeter you it’s the in We about into being are are think India, saw put operators we point and that’s look a wave the Wi-Fi business, developed developing I on content, can’t place XG it. very many sell our well the the size excited of So, with opportunity investments access talk positioned addition to you, The both, ability modem. in for And we tell into in infrastructure. I by technology. we’re and because When cases, at market, an have margins especially handset have of we also of of the course, do

sorry, say Cristiano, you Did you that Okay. is systems, business? say you or that an mobile booked in IoT did --

It’s within the stream. IoT revenue

Okay.

Okay. Fantastic.

Yes. I wireless to the I to what business. ASPs handset have for What accretive it’s the it’s is in our but mentioned margins. meant, compared IoT really business, that That’s is fixed we

Huawei just impact of to the latest so, the you a of like just help Okay. maybe the quite all? Maybe a the lot impact mean, been can XG follow-up. at you on has been any in wanted Are you. restrictions it restrictions devices recently. I Huawei? around if seeing And shipping looks business? with Have Huawei. ask shipping about recent I Thank U.S. components you to this

Yes.

anything fill Akash So, then and further. can has this start, is in maybe I’ll Alex. if he

of not are we of for while Huawei. Huawei. continue other the to effect to number So, allow we’ve haven’t don’t years. that ship is reports it had to seen the were I licenses including national don’t think determination reached restrictions from anything Those news they set Commerce us and Commerce new security And latest itself. considering Huawei. Commerce as to the a that issuing on characterize Qualcomm What it’s heard fair has will Wi-Fi goes that issues. chipsets, we’ve affect that some Those basically for XG to licenses a she licenses

impact. don’t Akash, of anything so, else? see those an licenses, And we the within scope

Nothing you. to add. Thank

America. of of Liani Bank with The next Tal the question is from line

Meaning, going days? composed last you Two X anything questions. qualitatively, lag discuss China demand quarters, is is Inventory about talk sales reopens into days I of the any from the we every China on levels translated just if understand quarter need inventory inventory to is China there versus should doubled and is And the what the lag what that it reopens? from we And want you? what or should quarters. being from how handsets, demand for recovery from about lag high the to more been there in think up and in X because has that Can be of demand to value? special the it time second, as

Yes.

it’s about top the What to given on time inventory, not some -- do months, X our perspective, during is, changes really way X necessarily like Tal, From and really So advance, that room to it’s our period. of plus starts. start might would for we’re X it’s Akash. the wafers, we the wafer happen in lead to X mix inventory months

framework that’s the which we So, operate. under

inventory You’re balance as right how where there. through current the we that higher than call, to is to went And rationale like the be. earlier ended it up in I we’d our

we’re our we of with working over it normalize confident do time, feel and we’ll and we kind suppliers, So, can that.

lag, we question into it. happen think -- the the the the year, June into half already embedded second to future, our in March through benefit we comes of demand as back which to provided ability second the drawdowns your from then normalizes, on calendar quarter, but inventory going go the into the way have as that’s view quarter we I the and On we is expect as

we it the part. I Can Got negotiations getting terms stable licensing as any a said need of you it to question. your is of, anything licensing Ericsson. on portion about as in discussions, was question be today previous the it. you that discuss -- aware or and Last year? forthcoming repeated I’m or Nokia what saw

into signed are No Alex. is It is as All year until up So, fiscal described OEMs previously. the stable really are license other parts, licenses no -- term. a up major to to they renewals we’ve couple to evolved, Nokia as just business. longer The Nokia split not handset long coming new this basically ‘XX. QTL were Microsoft. the as infrastructure material Those of

So, that’s where pretty stand. much things

Your C.J. ISI. comes with from question Evercore next Muse

I if Two may.

ago, back talked kind correction. if The you you first of one, two-quarter a about three look months

three. at least Now it’s

around inventory? statement And then, spoke customers how over change just things curious level down second is last How versus declining Thanks building semiconductor would of about onetime months. to love volume reduced of And of thoughts kind ‘XX? is QCT around any Qualcomm much hear demand How so volumes? transpired the so to the catch-up wafer payment earlier start of three the you much. and to there margins And to your a calendar to think question, in working have of commitments. set on here impact just your inventory, end kind risk the kind it

from So, an couple perspective, there inventory a first of drivers C.J., it. on question, to your are

same significant of the is drawdown. the the is is And I’d market; first factors. seen And the say, IoT characteristics. third, both weaker inventory also So, we’ve having sum are then second

strength which step And so, doesn’t the impact you those lasts. impacting is the when combination seeing back, this shorter-term thing -- period a a factors doesn’t drawdown time drawdown you’re as it the look the business. of for that of the it, we at necessarily Again,

And your be so, not as the recovery repeat it I you question? in to we’ll a Can I’m from position second happens, benefit it. well. sure understood

sure. Yes,

pricing the down with if particularly it volume to you’re TSMC, to taking and/or wafer payments? your As catch-up relates any purchases, risk commitments,

Yes.

of were So, more our of commitments. than prepayments in a rather the volume form lot commitments

time. the report of point. over you a prepayment period navigating and through this longer So, nothing just back we’re But that to those means get at

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

how Yes. to we summarize, just I the earnings Maybe see think call.

scale, XXXX challenges, very generation. our our FWA, XR given we short-term we about initiatives, sheet remain and PCs, and confident beyond ability balance including think free consistent to auto, the downturn look the cash increasing we When XG of environment, Qualcomm, current strong economic many strong history I of flow we’ll navigate industrial. in in see growth it talk at for the our and

and as continue As you control, we’ll we our on even to taking emerge believe we strategy. stronger we’re we action execute can see, can where

and we’ll on value Qualcomm’s and success, focused deliver We’re diligently and auto company drive stockholders. to work long-term diversify the IoT, for to especially continue growth,

know contributions I’d like Thank for employees Qualcomm call. as suppliers, it a popular dedication our earnings to and as all thank was I you. for well the all thank partners you attending the many to and the today. day and

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

You disconnect. may now