Q1 2026 Qorvo Inc Earnings Call

Good day and welcome to the qorvo Inc. First quarter 2026 earnings conference call.

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I would now like to turn the conference over to Douglas Toledo, Vice President of Investor Relations. Please go ahead.

Thanks very much. Hello everyone and welcome to Qorvo's fiscal 2026 first quarter earnings call. This call will include forward-looking statements that involve risk factors that could cause our actual results to differ materially from management's current expectations.

We encourage you to review the Safe Harbor statement contained in the earnings release published today, as well as the risk factors associated with our business and our annual report on Form 10-K filed with the SEC, because these risk factors may affect our operations and financial results.

In today's release, and on today's call, we provide both GAAP and non-GAAP financial results. We provide this supplemental information to enable investors to perform additional comparisons of operating results and to analyze financial performance without the impact of certain non-cash expenses or other items that may obscure trends in our underlying performance.

During our call, our comments and comparisons to the income statement will be based primarily on non-GAAP results. For a complete reconciliation of GAAP to non-GAAP financial measures, please refer to our earnings release issued earlier today, available on our investor relations website at IR.Qorvo.com under Financial Releases.

Joining us today are Robert Bruggeworth, President and CEO; Grant Brown, Chief Financial Officer; Dave Fullwood, Senior Vice President of Sales and Marketing; Philip Chesley, President of High Performance Analog; Eric Creston, President of our Connectivity and Sensors Group; Frank Stewart, President of our Advanced Cellular Group, as well as other members of Qorvo's management team. And with that, I'll turn the call over to Bob.

Thanks, Bob. Welcome, everyone, to our call. Qorvo delivered a strong first quarter of fiscal 2026, with notable achievements across our three operating segments.

Beginning with ACG, we continue to leverage the breadth and performance advantages of our cellular product portfolio. For our largest customer, we supply four categories of highly differentiated products. They are antenna tuners.

Filters and switches integrated modules and envelope tracking power management.

Corvo's envelope tracking PMIC for this customer has been custom developed to pair with their internal baseband, and this represents a durable, multi-year content opportunity.

In HPA, our growth investments are in defense and aerospace, and power management.

The Fence and Aerospace is HPA's largest market by revenue, and we expect durable year-over-year growth in DNA, supported by increases in U.S. and allied defense spending.

In power management, we are leveraging our leadership in PICs and motor control to diversify across markets, including consumer, defense, aerospace, industrial, enterprise, and mobile.

Growth applications include enterprise and AI data centers, wearables, drones, robotics, smartphones, and advanced power management solutions for AESA radars.

In CSG, we supported Wi-Fi, access points, and flagship smartphones with Wi-Fi, 7 front ends, while also aligning with market-leading chipset providers to develop next-generation solutions for Wi-Fi 8.

CSD is also leveraging our Ultra Wideband and Matter portfolio to scale new use cases and diversify revenue.

Ultra-wideband is our third largest investment area providing Qorvo. A significant long-term opportunity for diversification and growth as applications proliferate.

We are engaged broadly across markets and maintain a robust ultra-wideband sales funnel with over $2 billion of qualified opportunities.

Now, turning to strategic highlights by market.

In the automotive market, Corva's ultra-wideband technology enables a range of automotive use cases such as secure access using smartphones and smartwatches. In addition to key fobs, it also supports precision short-range radar applications, including child presence detection, hands-free liftgate access, and intrusion detection.

During the quarter, Qorvo was awarded an ultra-wideband design win for a leading automotive OEM based in Japan.

And secured an ultra-wideband win in support of the world's leading EV manufacturer.

For automotive asset tracking, we were selected to supply Ultra Wideband tags for an automotive OEM based in South Korea.

These tags enable the OEM to enhance operational efficiencies as cars are manufactured and transported.

In consumer markets, we secured a Wi-Fi 7 design win in augmented reality glasses. This is a growth category, and Qorvo is also supplying Wi-Fi 6 and Wi-Fi 7 SIMs for leading suppliers of our glasses and VR goggles.

To accompany, headquartered in the U.S.

During the defense and aerospace markets, Qorvo's opportunities continue to expand. Our sales funnel increased approximately $2 billion sequentially to over $7 billion.

This growth reflects a sharp increase in both U.S. and international defense spending, and Qorvo's expanding position in high-priority programs.

Recent U.S. budget reconciliation legislation includes approximately $150 billion in additional U.S. defense funding.

This is an incremental Tailwind to revenue, given Qorvo's strategic importance to the DoD and leading defense primes.

We are actively engaged across a broad range of advanced programs, including radar, communications, satcom, and missile defense. We also benefit from initiatives such as the Golden Dome multi-layer defense system.

We are also beneficiaries of increased EU funding, and I like defense funding in ground, airborne, ship, and space-based sensing platforms.

Corvo's uniquely positioned. In this market, we offer gas, GaN (gallium nitride) bar saw, and advanced multi-chip packaging, all manufactured onshore in the U.S.

These capabilities, coupled with our silicon beamforming technology, are critical enablers for modernizing defense platforms.

But integrating these core technologies, Qorvo's able to enhance system-level performance, reduce size and weight, and deliver greater value across increasingly complex architectures.

To address increasing requirements for functional density and efficiency, we introduced two highly integrated S-band switch filter bank modules, leveraging BA and SOI technologies.

Additionally, we expanded our satcom portfolio with a new GaN-based K-band power amplifier that delivers superior levels of integration, bandwidth, and power efficiency to meet the needs of next-generation LEO constellations.

In industrial and enterprise markets, Courville enabled the demonstration of breakthrough new enterprise networking applications with a leading Tier 1 equipment manufacturer.

We've engaged with this customer and other Tier 1 equipment manufacturers for a number of years to incorporate Qorvo's ultra-wideband solutions into their network access points.

These access points have already begun to ship to end customers as part of their Wi-Fi 7 deployments. This enables a range of ultra-precise applications such as indoor navigation, location awareness, and asset tracking that deliver superior real-time location accuracy in high-density venues such as factories, warehouses, offices, airports, hospitals, campuses, retail locations, and stadiums. In addition to this, Ultra-Wideband engagement, Qorvo supports this customers' enterprise ecosystem with Wi-Fi 7 front ends and filtering solutions.

In terms of infrastructure, there's strong momentum in DOCSIS 4.0 broadband cable access. Qorvo is a market leader, and we are well aligned with industry leaders in the continuing evolution of DOCSIS standards and capabilities.

During the June quarter, we released two new GaN-based power doubler amplifiers supporting the industry's transition to more intelligent and adaptive hybrid fiber coax systems.

For the base station market, we sampled key customers' new solutions, including high efficiency, pre-drill, and high rejection buff filters.

Corvo's newest small signal solutions offer higher performance and tighter integration for massive MIMO, fixed wireless access, and other 5G deployments.

In the mobile market.

We are investing to increase our content opportunity at our largest customer in future programs over multiple years.

We've expanded our portfolio for this customer with ET Power Management. We expect to achieve greater than 10% contact growth in this year's fall launch compared to last year's fall launch.

At our second largest customer, our solutions span our smartphone portfolio.

Content to share includes.

Low band pads, mid-high band pads, and ultra-high-end pads, as well as mid-high, secondary transmit antenna, tuning discrete filters, and Wi-Fi, 7 SIMs.

We also supported the ramp of multiple smartphone models by an Android OEM based in North America.

Corvo supports this customer with multiple high-value placements across product categories.

For Android OS-based shipments in China, increased sequentially during the quarter as expected and in line with the seasonal ramp profile of 5G smartphones.

We continue to supply mid-tier design wins awarded prior to our pivot from lower margin Android 5G. However, 5G product development hdg, now targets the premium and Flagship Sears.

During the quarter, we secured multiple Wi-Fi 7 design wins across leading Android smartphone OEMs using MediaTek's Dimensity chipset.

These winds are concentrated in the flagship and premium tiers and we are engaged to support Wi-Fi, 8 deployments. And the upper tiers of the Android smartphones as early as the second half of calendar, 26.

Looking across our operating segments, we're expanding our content opportunity in HBG with our largest customer while diversifying across markets, customers, and product categories, and HBA and CSG.

We are operating the business with discipline and continue to evaluate opportunities to optimize costs.

For businesses that do not meet our financial or strategic objectives, we will continue to act decisively, whether through divestiture or exit, to focus our resources on core high-performing areas. Since last year, we have exited base station and PANS, as well as our silicon carbide business.

Pivoted from legacy Android programs, where entire value product categories began a sales process related to our Maze Force Sensing business. We pursued a broad set of actions to optimize our global factory network. Most recently, we transitioned gas wafer production from our Greensboro, North Carolina fab to our Hillsboro, Oregon fab.

In 2026, providing an additional tailwind to margin when complete.

To build on this, today we're announcing the closure of our Greensboro Fab and the transfer of our soft filter production to our Richardson, Texas Fab. In his remarks, Grant will provide additional information on this, including timing and savings. We want to thank all the employees who are supporting us through this closure to ensure a seamless transition for our customers. And with that, I'll turn it over to Grant.

Thanks Bob and good afternoon. Everyone corvo's fiscal, first quarter revenue of 819 million. Non-gaap gross margin of 44% and non-gaap diluted earnings of 92 cents per share all compared favorably to guidance. During the quarter, our largest customer represented, approximately 41% of Revenue.

On the balance sheet. As of quarter end, we held approximately 1.2 billion dollars in cash and equivalents. We currently have approximately 1 and a half billion dollars of long-term debt outstanding and no near-term maturities.

We ended the quarter with a net inventory. Balance of 638 million, this represents a slight, sequential reduction, and a decrease of 89 million on a year-over-year basis.

During the quarter, we generated operating cash flow of approximately $183 million and incurred $38 million of CapEx, which resulted in free cash flow of $145 million.

From an operational perspective, the closure of our Costa Rica site remains on track, and we anticipate a smooth transition. We continue to expect this action will be completed early next calendar year as we move production and complete the sale of the facilities.

As Bob mentioned, we have also decided to close our manufacturing facility in North Carolina to further consolidate our internal factory footprint. The closure of a wafer fab requires more time than the closure of a packaging assembly and test location, and we currently expect the associated cost efficiencies to benefit non-GAAP gross margin beginning late in fiscal 2027.

In order to transfer our soft filter production out of North Carolina, we have begun to bring up a new production line at our Texas location and will be working closely with customers to ensure a seamless transition.

For modeling purposes, shut down and restructuring activities, such as those related to the closure of our North Carolina and Costa Rica sites, are excluded from non-GAAP results. Conversely, the operating expenses associated with bringing up a new line, as is the case with the saw line in Texas, are included in non-GAAP results.

In fiscal 26, we expect non-gaap Opex related to the startup costs for the Texas saw line of 10 to 20 million with minimal expense, continuing into fiscal 27.

Subject to factory volume and mix, we expect the annual savings in non-GAAP COGS for each year after the new line goes live to exceed the one-time startup costs incurred in fiscal 2026.

Regarding our outlook for fiscal. Q2, our guidance reflects strong execution, and demand across multiple end markets, while factoring in our current views on macroeconomic, and geopolitical Dynamics, our expectations for the September quarter are as follows revenue of 1 billion, 255 million plus or minus 50 million. Non-gaap gross margin between 48 and 50 cents and non-gaap diluted EPS of $2 plus or minus 25 cents.

The momentum we are seeing in both revenue and bookings is being driven primarily by robust underlying demand and meaningful content expansion at our largest customer. We continue to benefit from strong unit volumes across existing platforms and more than 10% year-over-year content growth on the ramping platform.

Growth in our defense and aerospace business is supported by increasing content and rising defense spending both domestically and internationally. Additionally, our infrastructure business is benefiting from the industry's transition to DOCSIS 4.0, where Qorvo is a leading supplier of broadband amplifiers.

These drivers are being partially offset. As we continue to shift away from lower-margin mass to your Android 5G business, which is proceeding as planned.

In the June quarter acg's, Android Revenue declined. 18% year-over-year to approximately 240 million with china-based Android Revenue down, 29% year-over-year to just under a hundred million dollars.

Reflected in our Outlook.

Gross margin continues to improve on a year-over-year basis.

Q1 non-GAAP gross margin increased approximately 300 basis points versus last fiscal year, and Q2 non-GAAP gross margin is expected to increase 200 basis points versus last fiscal year at the midpoint.

This improvement is a direct result of multiple initiatives. We have actively managed our product portfolio and pricing strategies to reduce our exposure to mass tier and Android 5G. We have positioned the company to benefit from growth in DNA, which is margin accretive given the high-mix, low-volume nature of the business. We've divested or exited margin-dilutive businesses. And finally, we continue to manage manufacturing costs aggressively while consolidating our factory footprint.

We project non-gaap operating expenses in the September quarter to be approximately 265 million plus or minus 3%. The sequential increase in Opex reflects higher incentive based compensation given the expected outperformance. During the first half of the fiscal year, FX headwinds related to the weak US dollar,

And the impact of tariffs.

Total of X also includes other operating expenses of $5 million associated with the startup of our soft filter line in Texas, among other items.

Below the operating income line.

Non-operating expense is expected to be approximately $10 million, reflecting interest paid on our fixed-rate debt, offset by interest income earned on our cash balances, FX gains or losses, along with other items.

Our non-gaap tax rate for fiscal 26, is now expected to be approximately. 15%, this is down from between 18 to 19% as was previously communicated. We continue to monitor the situation as the specific implementation of the new tax bill in the US as well as changes to International tax policy May evolve over time.

On the corporate development front, we continue to seek strategic alternatives for our members for the sensing business, which is incurring approximately $5 million of non-GAAP Opex per quarter. We remain committed to optimizing our portfolio and regularly evaluating each of our investment areas.

We are confident the steps we are taking today across our product portfolio, business segments, and manufacturing footprint position the company to expand profitability. The benefits of these strategic initiatives will continue to become evident as we advance through fiscal 2026 and into fiscal 2027. At this time, please open the line for questions. Thank you.

Thank you. We will now begin the question-and-answer session.

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At this time, we will pause momentarily to assemble our roster.

The first question comes from Thomas Ali with Barclays. Please go ahead.

Hey guys, thanks for taking my question. Uh, a nice results. So I just want to start off with the the seasonality of this year. It looks like things are tracking kind of relatively in line with with 2024 uh in the in the June quarter. If you look at the remainder of the Year, you guys had previously kind of talked about the largest customer kind of being flat to slightly up modestly, but you're kind of reiterating this view that there's double digit growth in content fall onto or fall launch. Can you talk about the disconnect there and is December trying to normal seasonal which gets you to that kind of goal. Um just help me understand the seasonality of the comparison to last year. Um just given the strong content up year over year. Thank you.

At this stage, but I can, I can walk through some puts and takes by, by business segments, Beyond just ACG. Uh, but in ACG, our Outlook is still for a single digit Decline and that's unchanged. We remain on track to exit the 150, to 200 million of low margin business, as part of our strategic, portfolio shift there in Android 5G, uh, and we currently expect about 2/3 of that year-over-year, decline, uh, in the Android business, will our in the second half of fiscal 25. So that's that's yet to come in the second half which which gets to at least partially addressing your December question uh, at our at our largest customer. We remain encouraged by the the recent strength. And uh we're seeing unit volumes there on existing platforms uh come in to our expectations and strong as well as the content gain that we see of 10% or more on the ramping platform which is encouraging. Um in some of the changes we've seen uh in terms of the top line for fiscal 26, RN CSG.

Which is trending below our earlier expectations due in part to a automotive, customer delaying approach and ramp there, that included our Ultra wideband SOC that, that program is now anticipated to ramp in fiscal 27. So we, uh, continue to expect year-over-year growth for CSG. However, it'll be in the, the low single digits versus 10 to 12% as we guided previously. And then lastly, uh, our expectations for HPA, uh, remain unchanged and on track for a strong double digit growth this year. Uh,

In DNA rebound and infrastructure tied to the DOCSIS upgrades and some other positive Tailwinds. Um, we can get into, uh, you know, while we're encouraged by the first half strength that we've seen. We're also mindful of the seasonality in smartphones in the back half as we shift the portfolio away from Mass tier Android but oh overall we remain uh very confident in the strategy, the execution and and our uh strong strategic position.

Super helpful. Thank you. And then just to dive down onto the Android point there. So, you gave a little extra color this quarter talking about Android and like the 240 million range that's up 16% sequentially by my numbers, maybe give or take where people have marched set up. But you guys had previously said kind of up slightly. Is that dynamic something that you think is more of a pull forward, or do you think that's customers kind of coming to you? Hey, you're exiting the business, this is the end of the life here, we want to take a couple more products before you're done producing? Just maybe explain the dynamic there and what happened versus your original expectations.

This is Dave. I'll take that one. So,

Yeah, I mean, if you look at the Android ecosystem, you know, we've got we've got customers in in China, as well as globally and in a premium tier. And remember, we're not exiting that part of the market. So we talked, I think last time about some share games, uh, that we have in the second half, uh, at our at our large Korean customer and so, we're starting to see the benefit of that, is that starts to ramp up. Um, we've also got really good content and a US.

Customer that Bob mentioned, that is prepared remarks. Um, and that's ramping now as well. So I think that's some of the dynamics you're seeing.

Um, we talked about China a little bit earlier and, you know, we do see a little bit of buffering probably there with some of the uncertainty in the trade dynamics.

And so there’s probably a little bit of that going on in China. Um, but we’ve still got, you know, engagements there in the high tier. But that, that business is definitely declining as we head into the back half of the year.

Thank you. The next question is from Harsh Kumar with Piper Sandler. Please go ahead.

Hey guys. Uh, also wanted to Echo my congratulations. These are extremely great and, and awesome results. I had 2 as well. Um, I I I think you're moving to the 50% or 48 to 50% gross margin Mark a lot faster than I think I hadn't anticipated personally and I was curious, you've got a bunch of things going on. You're exiting businesses, you're doing Fab rationalization. But but if you were to say which of those uh initiatives have probably the maximum amount of Swing uh Factor that's driving your margins up so much higher, maybe I I would be very curious to to understand uh you know what's what's making the margins go up so much faster. If there's this, if there's 1 that's more impactful than the other and I've got to follow up.

This mixed perspective, and we've also exited the silicon carbide business, which was dragging against our gross margin profile. Finally, we've moved our Wi-Fi business from an underloaded North Carolina fab to an Oregon fab that's at higher volumes, and we're seeing a benefit there. So I would say that the single largest theme in terms of gross margin improvement is both cost reductions and the other actions we've taken.

Okay, uh, and I assume that applies to the September quarter as well.

Yeah. That's a continuation of a lot of the same trends.

Got it. And then from my follow-up, um, you know, you talked a lot about increased content, but you're seeing on the internal modem. But I wanted to ask about the mid-high pad.

I believe you are on a legit supplier in the Android ecosystem of that pad. Um, and I think from my understanding you have a window at a large U.S. customer.

It is, am I to a zoom with the kind of growth that you're talking about and, and, and your content that you have a, a shot at it or you want something or maybe there's contribution there, or is it just the internal modem Perforating, uh, to the, uh, ecosystem or phone models?

Of course, this is Bob. I'll take that. So, for this Fall's launch, the team did a great job of delivering dollar content growth that both Grant and I have talked about—over 10%. But as far as next year's phone, which is where I think you're hitting, we do remain confident in our position with our largest customer. However, there are two factors that we can consider.

When we look at the business, there is one technical and one commercial. In terms of technical...

The technology that we're delivering and our product development. We've done. We're delivering results and we're laser focused on an execution. So I like how the team's progression there, commercially with the expiration of a certain long-term Supply agreement, you know, that's also helping us and as we've looked and we've talked about this before the, uh, expansion of their skus, where they launched the 16e which to your point. We did have ETP mix on the internal modem these all create opportunities for us. So we think we positioned the business nicely but we'll see how it all plays out next year.

Our next question is from Christopher Rowland with Susana. Please go ahead.

Hey, uh, thanks for the question and, uh, really great results here. Um, so I guess first of all, uh, just following up on the gross margin in progress, so it's probably for a grant here.

Um, so you guys did mention, you could hit High 40s your this year and you're going to do that looks like uh but she mentioned you could hit 50%. Uh, next year, I was wondering if maybe we could get an update there and as we look forward into next year, perhaps you can walk us, give us a gross margin walk. What's contributing uh to what um in terms of that Improvement. Thanks.

Sure, Chris this is Grant. Let me let me take that 1. Um, you know as we look forward you know, beyond fiscal 26 there there are largely the initiatives that we've discussed, right? The Costa Rica and North Carolina closures and we'll be moving into, uh, Fabs. That will be more heavily loaded. So that'll be beneficial. We'll be changing the business mix. Uh, and we'll have growth in DNA, uh, above our corporate average. So that'll be margin accretive, uh, we're, we're laser focused on reducing costs. That's an ongoing activity. And we'll be able to, uh, benefit from that, uh, you know, but in terms of giving any guidance out into fiscal, 27 other than to say, we expect gross margins to continue to improve. Um, you know, I won't be providing any incremental guidance today. Uh, in terms of walking the overall uh, you know, fiscal 26 Improvement, the vast majority of it. As I mentioned, was really cost related, uh and due to the factory actions that we had taken previously, uh there is some inventory, uh, improved

Improvement there, you know, better, uh, excess obsolete, you know, better quality and yields, uh, you know, other items. But for the most part, the lion's share of the improvement is a direct result of those, uh, factory actions and the business growth we're seeing in margin-creative areas because of the capital we're allocating to those businesses.

Uh, any idea on how much particularly at your largest customer was pulled in? Uh, and then, you know, uh, Qualcomm has talked about an expectation of 30%, uh, internal modem at your largest customer, is that your expectation as well, uh, in the September guidance. Thank you. Maybe let me start Chris with the first part of your question and then I'll let Dave or Bob respond. Um, the uh, 15 million, um, would be

Relevant for the North Carolina Fab closure. We said it would be between 10 and 20 million of cost and fiscal 26. In order to bring up the saw line in our Texas location and that we would benefit uh at least that much uh, every year thereafter once the line goes live. So I would say that's on the low side and likely uh, related simply to the North Carolina facility, okay. And Chris, as far as architecture is go to the largest customer. We'll stick with our standard line though. We're not going to comment on that, but clearly in our is our expectations over time that they will use more of their internal modem. In the percentage will only grow Dave. You want to take the other party asked? Yeah, sure. Hey, Chris. Um, yeah. As far as your question about Poland demand. I mean, the strength we're seeing is primarily driven by the underlying uh demand. Fundamentals. We mentioned in the prepared remarks, around unit strength and content, gains, and smartphones, as well as increased spending and expanding content and defense, and the Broadband infrastructure upgrade. So, those are the

Major drivers outside of handsets were not seeing any pulling activity. The channel inventories are healthy, and customer behavior supports normal demand patterns. In fact, in some areas, we're seeing the opposite, which we do believe is related to tariffs, especially in our motor control business for power tools and garden equipment. We're starting to see demand push out just because of the uncertainty around the tariffs and trade policy concerns there.

Enhance that we're benefiting from the seasonal ramp. We talked about and uh, and further supported by some of the content gains, not only our largest customer, but I mentioned Samsung as well and others. Um, but we have seen some limited component inventory buffering, uh, due to the Tariff Dynamics.

Um, mostly in Android and and some of that's associated with Factory optimization as our customers, uh, try and optimize their Factory Footprints to the different geographies. They're shipping to. So we estimate that to be in the range of about 15 to 30 million dollars of added buffer, that, that could be out there. And we expect that it'll be reduced back down to normal, uh, throughout the rest of the calendar year. Um, having said that we're projecting our timing Android business will be down sequentially about 30 to 40 million dollars in this order. And then down again, in our fiscal Q3. So, all of that is contemplated in our guidance, and we continue to monitor these Dynamics closely, and we're going to continue to take discipline and conservative approach to the back half of the fiscal year. And I just do want to point out, we haven't changed our internal smartphone unit assumptions that we started the year with

Um, so we're kind of maintaining our position there as well.

Our next question is from Jim Schneider. With Goldman Sachs, please go ahead.

Good afternoon. Thanks for taking my question. I was wondering if you could, maybe comment a little bit on the defense business, clearly. It seems like it's, uh, tracking a little bit better than than what you expected. Can you maybe talk about, um, whether the step down was less than you expected in the quarter. How much you expect the defense vertical would be up, specifically in September and then maybe as a separate follow up on, uh, could you maybe serve address, uh, the m&a potential specifically in that, uh, defense area that you see out there in the market, do you see more or less opportunities in that vertical? And maybe kind of talk about the uh the uh the uh, the price or valuation environment. You see uh for both defense and broader HPA Acquisitions. Thank you.

Sure. Why don't we let Philip you want to cover the business and then I can talk to the m&a environment. Yeah, sure. Uh, so I think the, the strength that we're seeing uh, is not, uh, I mean we we had, it's not different than what we had forecasted. Um,

You know, I think it's Bob mentioned, you know, we're seeing really, uh, just our design opportunities in our funnel growth significantly. I think if I mentioned that we had increased it by over 2 billion dollars, uh, in in a quarter. Um, you know, we we are, you know, we are really critical in most calm, uh, radar satellite, satcom systems, uh, with the US government. And I think, you know what we're seeing is, you know, when when the administration first came in, there was a lot of executive orders.

Kind of what the priorities are. I think, as that is starting to become understood, what the priorities are and kind of figuring out where, where things are going, you know, we're we're seeing that as a Tailwind in in the near term as well. Um so I again I think you know we um,

Whether it's a radar platform, whether it's a drone, whether it is, you know, a satellite. Uh, there's just a tremendous amount of opportunity in front of us.

Uh, and, uh, you know, I think we're well positioned to get our unfair share.

Maybe on the m&a front, uh it the DNA space remains a very attractive uh area for us to to fill up this point. You know, our strengths there with customers and other Technologies um could lead us to be a better owner of of certain businesses. And so we're we're actively looking in that space. It's generally margin, a creative for us. Um, you know, and where the valuations make sense, and there's a strategic Merit for the transaction, where, where we are expecting to be active, uh, beyond that. Um, it's a typical deployment of our, uh, of our cash to return value to shareholders, uh, in a, in a disciplined manner.

Thank you.

Thank you.

Our next question is from Joe Moore. With Morgan Stanley, please go ahead.

Great. Thank you. Um, in terms of the Tariff related kind of buffering I guess.

you know, why isn't there more of that I would feel like

Given the dynamic of kind of Shifting tariff potential. It would just be who people to have a little bit more inventory. I guess, just, you know, what are those conversations like, and is there any kind of push back on you from your customers? Saying, you know, we need to pass along components savings to mitigate this any price pressure or anything. You might see from that.

Um, you know, it's difficult to precisely isolate it, right? Um, especially as you're coming off of a new seasonal pattern and our largest customer. And, you know, with the launch of the spring model, that included, our EP pick which was new content. And and we're in the early stages of the Fall, ramp where we've achieved greater than, you know, 10% content gains, which is, which is new as well. So, you know, given the preliminary sell through data, we're seeing uh, you know, most of the strength that we're seeing aligns with the phones that are being purchased, um, whether its third-party data, or the carriers themselves. But I don't know if that was I would say add to that is the only area where we've seen the tires impacting Dave mentioned, it's the battery operated power tools. That's the 1 area. It's clearly. We've seen it. Where it's not even buffering they're just holding off on their production team.

Plans to figure out where they're going to make things around the world until they understand what the tariffs are going to be. But but as for the other parts of our business, large defense obviously doesn't matter brand. Cover the phones. You know, we're not seeing it in other areas. The only area was in primarily is in the battery operated power tools area.

That's helpful. Thank you. And then as my follow-up, you mentioned, the CSG uh, kind of delay and and a little bit lower full year. Just anything we should be aware of there in terms of how to model the rest of the year. Is there a, a discrete fall off or is that just something that, you know, just ramps, a little later than you thought?

It's something that will affect the Top Line there, um, you know, in terms of the growth for the year, like I said, it would be in the single digits, uh, versus the kind of low double digits, as we had communicated, uh, in the past. Um, that would have been something that would have happened later in the year. So, it's pushing to fiscal 27. Um, you know, it, you know, it's as you think about that business. Um, you know, it's it's really the combination of our Wi-Fi business and our SOC business. As, as Bob pointed out our, our SOC business is um uh the third largest investment next to our um, mobile business initiatives and our DNA franchise, uh, you know, the soc business. You know, within CSG is, is generating annual revenues right now of around 60 million dollars. So the push out is Meaningful as you as you think about that particular business, uh, and it's incurring around 100 million of our backs. So,

You know, this is a meaningful shift for the CSG segment, uh, under the under the corvo Consolidated results.

Our next question comes from Krish tanker with Covenant Company. Please go ahead.

Yeah, hi, thanks for being my question. I 2 of them first 1 was kind of like clarification on the Poland is the Poland's mainly in June quarter, or are you also seeing Poland in the September quarter and within that among your largest customer how much of the current generation RF and power products are common or share the 2026 model? And then I had a longer term question for Bob. After that,

So in recent to quantify it, you know, David already said earlier that we were expecting, you know maybe 15 to 30 million dollars that that we would expect to see and that's all Incorporated in our guidance. So the unwinding of that in in our September quarter and throughout the rest of the year is all contemplated in. What we've been talking about today, um, there's anything more to add or you can ask Bob, your second question. Yeah. And and what Grant referred to, and I mentioned earlier, that's that's our component inventory from everything. We can see the what we're shipping is being built and sold through.

um so the so that 15 to 30 million, we're talking about is just some, some buffering that we've seen around our component inventory, mostly in China, but in other areas, as well as, as customers to optimize their factories and and maybe in response to tariffs or other reasons, as they move production from,

Got it, got it. Uh, I think just take a longer term question for Bob. Bob, Bob kind of curious your thoughts on edge AI implications for smartphones and artists. Uh it seems like there's like you know from a lot of standpoint you need more up, link my more capability and also I mean my the phones need to be upgraded to power Class 2 uh for the edge AI situation which could happen as early as the 2026 I for launch. I'm kind of curious your view on edge Ai and what it uh implies for a lot of content on a go forward basis.

Thanks for your question. I think you're correct that we are going to need more and better. Our apps that something we say all the time. Um, Frank, I don't, I think you can handle that question, that we've had a lot of discussions about exactly those things. We're not so much hung up on, is it being driven by AI? It's just always the carriers. Want to get people on and off the network faster. Particularly as you continue to load more and more data whether it's being driven by AI or not, that's secondary to us what, what we're focused on is how they keep changing the architectures to drive more and better RF. So Frank, you want to handle that.

Yeah, no. It it was a great question and simply stated. Yes, I agree with you. Uh, if if we take you all the way back to our analyst day, we talked about uh, 5G Advanced as something that was going to continue to drive, RF content more, and better, RF in the phone and a few of the examples. We referenced were exactly things that you highlighted, uh, additional both downlink and Uplink RFS in the phone and an increase in power levels in multiple bands, uh, uh, therefore expanding the power Class 2 levels from just 1 or 2 bands to multiple bands in the phone. So, yeah, I think, I think you hit, uh, hit on exactly what we expect to see over the next few years.

Thank you. Our next question is from Gary Moby with Loop Capital. Please go ahead.

Hey guys, thanks for taking my question. I wanted to respectfully push back on some of the guidance you're giving for fiscal year 2026.

Essentially, you're upsizing fiscal year 2026, or at least the first half, by about $100 million versus your prior.

Southeast or hard views.

And you know, that's the difference between, you know, having Revenue flat for the year or growing 3%, but yet you're saying only 15 to 30 million of. That upside is coming from pull forward. So is this a situation where the Year is off to a great start? But it's just too early to upsize your fiscal year 26 Outlook or is this really uh, a deep root of concern about Tara pull forwards?

Hey, Gary, this is Grant. Let me try to take a a stab at your question. I mean, generally speaking as we said there is, there's upside in demand that's broad-based. Uh, it's not just smartphones. We're seeing it in our growth, in our DNA business. Um, and then for the full year, I talked about some of the puts and takes by business segments, so we're seeing a push out of some revenue for CSG, uh, into fiscal 27 because of the large Automotive program there which which changes the uh, full year.

Here we're seeing a uh, about 2/3 of our 150 to 200 million dollars of our Android business that we expect to decline in fiscal 26, will also hit the second half, um, you know, and then on top of that, you know, uh, you know, we we do have the, the overhang of macroeconomic uncertainty. So, you know, the combination of all of these factors are leading to our internal views on uh the full year and and why we're not providing, you know, an update to our our early comments in January.

In CSG, you know, how much?

How tight is coupling from an R&D or from a man manufacturing perspective, are all 3 of those businesses on the RF side.

Sure. So I'll take a a first pass and then I'm sure Bob and Philip would want to weigh in as well. The, the businesses themselves are are rather tightly coupled, they share factories, uh, that share process engineering. They, they share, uh, product development in certain cases. Um, there are box filters for example, that are used in defense applications that are also used in Wi-Fi applications for CSG. Um, you know, there is a significant amount of overhead that's that's the same across the the different businesses. And in fact, uh, you know, there's a lot of learning that happens, whether it's, you know, base stations to uh, this the smartphones themselves or uh just customer uh customers that are shared for instance mobile customers across CSG and uh and ACG for example. So. So there is a a considerable amount of of shared resources amongst all the businesses. It's also true. That commercially our uh defense businesses. Appreciate our defense customers. Anyway I appreciate

The scale that we have from the, the size of our high volume factories that are, that are serving our mobile customers and vice versa, our mobile customers. Appreciate the, the commitment we have to, uh, our production lines and the technology advancements, and the diversity of our Revenue base and stability that comes along with the DNA business, and other areas. So, so, there's a lot of shared resources and, uh, and uh, shared positive sentiment amongst the, the customers across the businesses. The only thing I'll add brand, is they all use the same organ, Hillsboro, stop for gas. All 3 business units,

Thank you.

Our next question is from Chris Castle. With World research. Please go ahead.

Yes. Hi. I guess the first question just to clarification of um, you know, sort of what the uh what the Android business looks like exiting the fiscal year, uh, given all you said and, uh, uh, you be I I I think what my interpretation is, you you'd be sort of a China Android of about maybe 20 to 30 million exiting the year, but but I guess I don't know less sure if that's Complicated by some of the inventory buffering. If you could clarify kind of where you think China and China, Android is at the end of the year.

I think and maybe just a clarification. Chris on your question. Did you say exiting the year at 20 to 30 million of Android based China?

Business.

Yes.

Okay, I think that's on the low end there. There's a, there's still a um, a bifurcation of their product portfolio, they have Flagship and premium tier devices and we'll still look to participate in those. Uh, the customers will make their own cost and performance. Trade-offs, amongst the parts, but they'll still need to remain competitive. If if they want to feel the device that's going to sell well and consequently will be able to sell into the higher end of their portfolios. It won't be in the likely in the 2030 million dollar range. It will probably be higher than that but the trend is is down over time as we um, you know, continue to execute on our pricing strategies and and move forward. As we commented on this last quarter, our China based Android Revenue was a just under a hundred million dollars and and and it'll be trending lower over time.

Got it. Okay. That's helpful to calibrate us. Uh follow-up question was on Samsung and um there's 2 Dynamics there because I I think you're also a getting some of the mid-range there but you're still focused on the high end. I I guess 2 questions there is as you look into next year, you know, given uh the exit, the mid-range, you know some of the gains in the high end. What do you think happens to the Samsung business there? And then secondly, um, in the event that Samsung is more successful with their internal chipset, which they're, they're they're trying again on that, is that?

That a benefit for corvo content.

I'd be glad to take the second part. The answer is yes, we would love for them to be successful with their internal Baseline.

Yeah, and for our cross business units, not just ACG. Yeah, and you're right about exiting the mask here or there as well. It takes longer. The design cycles are longer; sometimes they use things for multiple generations, so you can kind of think of it very similar to how our China business is, but further out in time.

Any new technology from an RF standpoint, and so, you know, the opportunity there for more competition to come in goes up. And so, we'll probably see some decline in our content on the spring model.

Thank you. Our next question is from Carl Akerman with BNP Paribas. Please go ahead.

Yes, thank you. Um, with the saw line moving your Richardson facility, which...

Follows the consolidation of your Farmer's Branch facility in that business, in that Fab, two years ago, I guess. Are you at or near full utilization in the Richardson facility? And then, at what point do you need to significantly add capacity here? As we think about the free cash flow generation of that business? I don’t have a follow-up, please.

Sure, Carl. This is Grant. Um no we we have room there uh in our Richardson facility to expand and add the saw line uh We've improved the die size and overall device size of uh, a number of our products over the years, uh, meaningfully and that effectively increases your Your Capacity. As you can, don't have to run as many Wafers to to produce more dye that are smaller. So, you know, we've been very successful at, uh, the die size reductions and, and again, other device reductions in in order to accommodate, uh, all of the bar filter production, uh, that moved in from Farmers Branch as well as. Uh, the projected saw demand that we will move there from our North Carolina.

Carolina facility.

Got it. Um, thanks for that. Uh, yeah. If I could just go back to, I think, Gary's question a bit, you know, given there's no change in your smartphone unit assumption this year.

I think it's been pretty consistent about double digit content, changes, largest customer. Uh, there doesn't appear any clear signs of sheriff Poland's. And I, and I believe this, uh, the Android headwind of roughly 150 million was also consistent. So, um, I, I suppose barring macro uncertainty and maybe some push out of CSG from Automotive. Those seem to be the 2 primary variables. Uh, that would dictate. Whether we would move, you know, from what was the initial Outlook of flat here of your growth or are there any other mechanics that we should consider when thinking about the growth rate for this year? Thank you.

No. You're I think you're considering um, everything that we've said, you know, look we we could be wrong if we're overly conservative. Um you know we'll see how the unit volumes play out over the course of the year uh as well as the mix of those unit volumes. As we see over the course of the year that can meaningfully change our, our Top Line. Obviously, depending on share shifts amongst the the handset providers.

Thank you.

This concludes our question-and-answer session.

I would like to turn the conference back over to the management for closing remarks.

We want to thank everyone for joining us on tonight's call. We appreciate your interest, and we look forward to speaking with many of you at upcoming investor events. Thanks again, and let's have a great evening.

The conference has now concluded, thank you for attending today's presentation. You may now disconnect