Qorvo Q3 2026 Qorvo Inc Earnings Call | AllMind AI Earnings | AllMind AI
Q3 2026 Qorvo Inc Earnings Call
Speaker #1: Good day, and welcome to the Qorvo, Inc. Third Quarter 2026 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal the conference specialist by pressing the star key followed by zero.
Operator: Good day, and welcome to the Qorvo, Inc. Q4 2026 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch-tone phone. To withdraw your question, please press star then two. Please note that this event is being recorded. I would now like to turn the conference over to Douglas DeLieto, Vice President of Investor Relations. Please go ahead.
Operator: Good day, and welcome to the Qorvo, Inc. Q4 2026 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch-tone phone. To withdraw your question, please press star then two. Please note that this event is being recorded. I would now like to turn the conference over to Douglas DeLieto, Vice President of Investor Relations. Please go ahead.
Speaker #1: After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch-tone phone.
Speaker #1: To withdraw your question, please press star then two. Please note that this event is being recorded. I would now like to turn the conference over to Douglas DeLieto, Vice President of Investor Relations.
Speaker #1: Please go
Speaker #1: ahead. Thanks very much.
Douglas DeLieto: Thanks very much. Hello, everyone, and welcome to Qorvo's Fiscal 2026 Q4 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 in 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.
Douglas DeLieto: Thanks very much. Hello, everyone, and welcome to Qorvo's Fiscal 2026 Q4 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 in 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.
Speaker #2: Hello everyone, and welcome to Qorvo's fiscal 2026 third 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.
Speaker #2: 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.
Speaker #2: 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.
Speaker #2: During our call, our comments and comparisons to income statement items 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.
Douglas DeLieto: During our call, our comments and comparisons to income statement items will be based primarily on non-GAAP results. For 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. Lastly, for detailed information regarding the Skyworks and Qorvo combination announced on October 28, I encourage you to review the press release, investor presentation, Qorvo merger proxy, and related materials available on our investor relations website at ir.qorvo.com under events and presentations. Today's call will focus on our fiscal Q3 results as well as our outlook for the March Quarter, and we will not be commenting on the proposed business combination. Joining us today are Bob Bruggeworth, President and CEO, Grant Brown, CFO, Dave Fullwood, Senior Vice President of Sales and Marketing, and other members of Qorvo's management team.
During our call, our comments and comparisons to income statement items will be based primarily on non-GAAP results. For 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. Lastly, for detailed information regarding the Skyworks and Qorvo combination announced on October 28, I encourage you to review the press release, investor presentation, Qorvo merger proxy, and related materials available on our investor relations website at ir.qorvo.com under events and presentations. Today's call will focus on our fiscal Q3 results as well as our outlook for the March Quarter, and we will not be commenting on the proposed business combination. Joining us today are Bob Bruggeworth, President and CEO, Grant Brown, CFO, Dave Fullwood, Senior Vice President of Sales and Marketing, and other members of Qorvo's management team.
Speaker #2: Lastly, for detailed information regarding the Skyworks and Qorvo combination announced on October 28th, I encourage you to review the press release, investor presentation, Qorvo merger proxy, and related materials available on our investor relations website.
Speaker #2: At ir.qorvo.com, under Events and Presentations. Today's call will focus on our fiscal third quarter results, as well as our outlook for the March quarter, and we will not be commenting on the proposed business combination.
Speaker #2: Joining us today are Bob Bruggeworth, President and CEO; Grant Brown, CFO; Dave Fulwood, Senior Vice President of Sales and Marketing; and other members of Qorvo's management team.
Speaker #2: And with that, I'll turn the call over to Bob.
Douglas DeLieto: With that, I'll turn the call over to Bob.
With that, I'll turn the call over to Bob.
Speaker #3: Thanks, Doug, and welcome everyone to our call. In our fiscal third quarter, Qorvo delivered solid financial performance with notable strategic achievements across each operating segment.
Robert A. Bruggeworth: Thanks, Doug, and welcome everyone to our call. In our fiscal Q3, Qorvo delivered solid financial performance with notable strategic achievements across each operating segment. We continue to pursue our long-term growth strategy while executing on restructuring actions to optimize profitability and reduce capital intensity. In ACG, we are supporting the world's leading smartphone OEMs with best-in-class products for their highest value flagship and premium-tier devices. In CSG, we enjoy broad representation in Wi-Fi applications, and we are expanding our reach in automotive, enterprise, industrial, and other customer segments with our ultra-wideband technology. In HPA, we are growing across a range of customer applications such as defense and aerospace, satellite communications, power, and infrastructure. Within our factory network, we closed our Costa Rica facility in December a few months ahead of schedule and have transitioned to external partners.
Robert A. Bruggeworth: Thanks, Doug, and welcome everyone to our call. In our fiscal Q3, Qorvo delivered solid financial performance with notable strategic achievements across each operating segment. We continue to pursue our long-term growth strategy while executing on restructuring actions to optimize profitability and reduce capital intensity. In ACG, we are supporting the world's leading smartphone OEMs with best-in-class products for their highest value flagship and premium-tier devices. In CSG, we enjoy broad representation in Wi-Fi applications, and we are expanding our reach in automotive, enterprise, industrial, and other customer segments with our ultra-wideband technology. In HPA, we are growing across a range of customer applications such as defense and aerospace, satellite communications, power, and infrastructure. Within our factory network, we closed our Costa Rica facility in December a few months ahead of schedule and have transitioned to external partners.
Speaker #3: We continue to pursue our long-term growth strategy while executing on restructuring actions to optimize profitability and reduce capital intensity. In ACG, we are supporting the world's leading smartphone OEMs with best-in-class products for their highest value flagship and premium-tier devices.
Speaker #3: In CSG, we enjoy broad representation in Wi-Fi applications, and we are expanding our reach in automotive, enterprise, industrial, and other customer segments with our ultra-wideband technology.
Speaker #3: In HPA, we are growing across a range of customer applications such as defense and aerospace, satellite communications, power, and infrastructure. Within our factory network, we closed our Costa Rica facility in December, a few months ahead of schedule, and have transitioned to external partners.
Speaker #3: The transfer of SAW filter production from Greensboro, North Carolina, to Richardson, Texas, remains on track. With these actions, we will be able to operate more efficiently with reduced capital intensity, and we will continue to differentiate our products with onshore manufacturing of GaAs, GaN, BAW, SAW, and advanced multi-chip modules.
Robert A. Bruggeworth: The transfer of SAW filter production from Greensboro, North Carolina, to Richardson, Texas, remains on track. With these actions, we will be able to operate more efficiently with reduced capital intensity, and we will continue to differentiate our products with onshore manufacturing of GaAs, GaN, BAW, SAW, and advanced multi-chip modules. Turning to quarterly highlights, in ACG, December quarterly revenue declined sequentially in line with the view we provided last quarter and consistent with typical seasonality. At our largest customer, content gains on their ramping platform helped us support double-digit revenue growth compared to last December. We supply a diverse portfolio of high-performance discretes, tuners, ET PMIC, and integrated modules to our largest customer, not all of which have been awarded on the upcoming platforms. However, at this time for the upcoming fiscal year, we expect revenue at our largest customer to be approximately flat.
The transfer of SAW filter production from Greensboro, North Carolina, to Richardson, Texas, remains on track. With these actions, we will be able to operate more efficiently with reduced capital intensity, and we will continue to differentiate our products with onshore manufacturing of GaAs, GaN, BAW, SAW, and advanced multi-chip modules. Turning to quarterly highlights, in ACG, December quarterly revenue declined sequentially in line with the view we provided last quarter and consistent with typical seasonality. At our largest customer, content gains on their ramping platform helped us support double-digit revenue growth compared to last December. We supply a diverse portfolio of high-performance discretes, tuners, ET PMIC, and integrated modules to our largest customer, not all of which have been awarded on the upcoming platforms. However, at this time for the upcoming fiscal year, we expect revenue at our largest customer to be approximately flat.
Speaker #3: Turning to quarterly highlights, in ACG, December quarterly revenue declined sequentially in line with the view we provided last quarter and consistent with typical seasonality.
Speaker #3: At our largest customer, content gains on their ramping platform helped to support double-digit revenue growth compared to last December. We supply a diverse portfolio of high-performance discretes, tuners, ETPMIX, and integrated modules to our largest customer.
Speaker #3: Not all of which have been awarded on the upcoming platforms. However, at this time, for the upcoming fiscal year, we expect revenue at our largest customer to be approximately flat.
Speaker #3: For our ETPMIX, increasing internal modem adoption provides a multi-year structural tailwind as platforms transition away from third-party modems. With regard to integrated modules, on the ultra-high-band pad, we received lower share in the upcoming phone models than last year, and we expect our ultra-high-band pad revenue to decline year over year.
Robert A. Bruggeworth: For our ETP mix, increasing internal modem adoption provides a multi-year structural tailwind as platforms transition away from third-party modems. With regard to integrated modules, on the ultra-high-band PAD, we receive lower share in the upcoming phone models than last year, and we expect our ultra-high-band PAD revenue to decline year-over-year. This is a placement where we have demonstrated success across multiple generations. We remain confident in our highly differentiated technology and our ability to compete effectively over subsequent generations. In our largest customer's cellular-enabled iPads, we were awarded the high-band PAD, representing a product and technology milestone, and new content for Qorvo on that platform. We are extremely pleased to have secured this placement. The win gives us the opportunity to demonstrate capability and execute at scale on that platform, consistent with our long-term investment strategy.
For our ETP mix, increasing internal modem adoption provides a multi-year structural tailwind as platforms transition away from third-party modems. With regard to integrated modules, on the ultra-high-band PAD, we receive lower share in the upcoming phone models than last year, and we expect our ultra-high-band PAD revenue to decline year-over-year. This is a placement where we have demonstrated success across multiple generations. We remain confident in our highly differentiated technology and our ability to compete effectively over subsequent generations. In our largest customer's cellular-enabled iPads, we were awarded the high-band PAD, representing a product and technology milestone, and new content for Qorvo on that platform. We are extremely pleased to have secured this placement. The win gives us the opportunity to demonstrate capability and execute at scale on that platform, consistent with our long-term investment strategy.
Speaker #3: This is a placement where we have demonstrated success across multiple generations. We remain confident in our highly differentiated technology and our ability to compete effectively over subsequent generations.
Speaker #3: In our largest customer's cellular-enabled iPads, we were awarded the high-band pad, representing a product and technology milestone and new content for Qorvo on that platform.
Speaker #3: We are extremely pleased to have secured this placement. The win gives us the opportunity to demonstrate capability and execute at scale on that platform, consistent with our long-term investment strategy.
Speaker #3: Turning to Android, premium and flagship smartphones, while we remain a leading supplier in, we continue to reduce our exposure to low-margin, mass-tier smartphones. In the December quarter, total Android revenue declined sequentially in the low double digits.
Robert A. Bruggeworth: Turning to Android, we remain a leading supplier in premium and flagship smartphones while we continue to reduce our exposure to low-margin mass-tier smartphones. In the December quarter, total Android revenue declined sequentially in the low double digits. In the March quarter, we expect a greater-than-seasonal decline in Android revenue. For fiscal 2027, we expect Android revenue to decline by approximately $300 million versus fiscal 2026, driven primarily by our actions to reduce exposure to lower-margin segments and secondarily by the impact of memory pricing and availability on mass-tier Android build plans. Qorvo enjoys broad participation across smartphone OEMs, and we are not seeing signs of memory pricing or memory availability impacting the flagship and premium tiers. With our largest customer expected to be approximately flat, ACG revenue is expected to decline in fiscal 2027 by the reduction in Android revenue. This is an intentional resizing of our Android business.
Turning to Android, we remain a leading supplier in premium and flagship smartphones while we continue to reduce our exposure to low-margin mass-tier smartphones. In the December quarter, total Android revenue declined sequentially in the low double digits. In the March quarter, we expect a greater-than-seasonal decline in Android revenue. For fiscal 2027, we expect Android revenue to decline by approximately $300 million versus fiscal 2026, driven primarily by our actions to reduce exposure to lower-margin segments and secondarily by the impact of memory pricing and availability on mass-tier Android build plans. Qorvo enjoys broad participation across smartphone OEMs, and we are not seeing signs of memory pricing or memory availability impacting the flagship and premium tiers. With our largest customer expected to be approximately flat, ACG revenue is expected to decline in fiscal 2027 by the reduction in Android revenue. This is an intentional resizing of our Android business.
Speaker #3: In the March quarter, we expect a greater-than-seasonal decline in Android revenue. For fiscal '27, we expect Android revenue to decline by approximately $300 million versus fiscal '26, driven primarily by our actions to reduce exposure to lower-margin segments and secondarily by the impact of memory pricing and availability on mass-tier Android build plans.
Speaker #3: Qorvo enjoys broad participation across smartphone OEMs, and we are not seeing signs of memory pricing or memory availability impacting the flagship and premium tiers.
Speaker #3: With our largest customer expected to be approximately flat, ACG revenue is expected to decline in fiscal '27 by revenue. This is an intentional resizing the reduction in Android of our Android business.
Speaker #3: We are reducing exposure to lower-margin segments while continuing to serve Android’s high-value, premium, and flagship tiers. We expect the improvement in product mix to support a higher gross margin in ACG.
Robert A. Bruggeworth: We are reducing exposure to lower-margin segments while continuing to serve Android's high-volume premium and flagship tiers. We expect the improvement in product mix to support a higher gross margin in ACG. Additionally, with ongoing OpEx reduction efforts, we expect to deliver expanding operating margins in ACG on the healthier revenue mix. In CSG, we are on track with an automotive ultra-wideband program with a leading automotive tier one. Regarding this platform, we are very pleased to announce we did receive our first production orders during the December quarter. This program will span multiple years and support multiple OEMs. We continue to see expansion of our engagements across the automotive customer base. Use cases for Qorvo's automotive ultra-wideband technology include secure access, digital key, child presence detection, and short-range radar sensing.
We are reducing exposure to lower-margin segments while continuing to serve Android's high-volume premium and flagship tiers. We expect the improvement in product mix to support a higher gross margin in ACG. Additionally, with ongoing OpEx reduction efforts, we expect to deliver expanding operating margins in ACG on the healthier revenue mix. In CSG, we are on track with an automotive ultra-wideband program with a leading automotive tier one. Regarding this platform, we are very pleased to announce we did receive our first production orders during the December quarter. This program will span multiple years and support multiple OEMs. We continue to see expansion of our engagements across the automotive customer base. Use cases for Qorvo's automotive ultra-wideband technology include secure access, digital key, child presence detection, and short-range radar sensing.
Speaker #3: Additionally, with ongoing OPEX reduction efforts, we expect to deliver expanding operating margins in ACG on the healthier revenue mix. In CSG, we are on track with an automotive ultra-wideband program with a leading automotive Tier One.
Speaker #3: Regarding this platform, we are very pleased to announce we did receive our first production orders during the December quarter. This program will span multiple years and support multiple OEMs.
Speaker #3: We continue to see expansion of our engagements across the automotive customer base. Use cases for Qorvo's automotive ultra-wideband technology include secure access, digital key, child presence detection, and short-range radar sensing.
Speaker #3: We are supplying both our ultra-wideband and Wi-Fi 7 solutions in collaboration with multiple tier-one manufacturers of network access points. We are seeing strong customer demand, and initial deployments include hospitals, factories, and other enterprises requiring ultra-precision indoor navigation and location awareness.
Robert A. Bruggeworth: We are supplying both our Ultra-Wideband and Wi-Fi 7 solutions in collaboration with multiple tier one manufacturers of network access points. We are seeing strong customer demand, and initial deployments include hospitals, factories, and other enterprises requiring ultra-precision indoor navigation and location awareness. Our Wi-Fi portfolio is proudly represented in flagship smartphones, fiber gateways, mesh networks, client devices, and SATCOM ground terminals, and we continue to expand our Wi-Fi, FEM, and filter portfolio to enable higher bandwidth, lower latency, interconnected networks. We delivered first Wi-Fi 8 samples during the December quarter, and customer engagement in Wi-Fi 8 is increasing. Regarding the CSG restructuring discussed last quarter, these actions remain on track. During the quarter, we successfully divested our MEMS-based sensing solutions business. While this represents a headwind to year-over-year CSG growth next fiscal year, it is one of multiple initiatives we are undertaking to improve CSG's profitability.
We are supplying both our Ultra-Wideband and Wi-Fi 7 solutions in collaboration with multiple tier one manufacturers of network access points. We are seeing strong customer demand, and initial deployments include hospitals, factories, and other enterprises requiring ultra-precision indoor navigation and location awareness. Our Wi-Fi portfolio is proudly represented in flagship smartphones, fiber gateways, mesh networks, client devices, and SATCOM ground terminals, and we continue to expand our Wi-Fi, FEM, and filter portfolio to enable higher bandwidth, lower latency, interconnected networks. We delivered first Wi-Fi 8 samples during the December quarter, and customer engagement in Wi-Fi 8 is increasing. Regarding the CSG restructuring discussed last quarter, these actions remain on track. During the quarter, we successfully divested our MEMS-based sensing solutions business. While this represents a headwind to year-over-year CSG growth next fiscal year, it is one of multiple initiatives we are undertaking to improve CSG's profitability.
Speaker #3: Our Wi-Fi portfolio is proudly represented in flagship smartphones, fiber gateways, mesh networks, client devices, and SATCOM ground terminals, and we continue to expand our Wi-Fi, FEM, and filter portfolio to enable higher bandwidth, lower latency, interconnected networks.
Speaker #3: We delivered first Wi-Fi 8 samples during the December quarter, and customer engagement in Wi-Fi 8 is increasing. Regarding the CSG restructuring discussed last quarter, these actions remain on track.
Speaker #3: During the quarter, we successfully divested our MEMS-based sensing solutions business. While this represents a headwind to year-over-year CSG growth, next fiscal year, it is one of multiple initiatives we are undertaking to improve CSG's profitability.
Speaker #3: Turning to HPA, we continue to see multi-year tailwinds in DNA, data center power, and infrastructure markets. In DNA, the passage of the fiscal ’26 NDAA includes top priorities such as Golden Dome, the F-47 fighter, and the Navy's next-generation fighters, warships, and drones.
Robert A. Bruggeworth: Turning to HPA, we continue to see multi-year tailwinds in D&A, data center power, and infrastructure markets. In D&A, the passage of the fiscal 2026 NDAA includes top priorities such as Golden Dome, the F-47 fighter, and the Navy's next-generation fighters, warships, and drones. Qorvo is a beneficiary of new platforms, upgrade cycles, RF content growth, and increases in defense spending. As an example, Golden Dome is a multi-layer defense system that requires significant RF content. For the full fiscal year 2027, sales in D&A markets are expected to total approximately $500 million. In power management, our strategic emphasis on PMIC for enterprise-class SSDs has been met with continued data center growth where customer demand has been very strong. During the quarter, we taped out our first chip for our next-generation enterprise SSD platform. Other power opportunities for Qorvo include AESA radars, drones, robotics, wearables, and smartphones.
Turning to HPA, we continue to see multi-year tailwinds in D&A, data center power, and infrastructure markets. In D&A, the passage of the fiscal 2026 NDAA includes top priorities such as Golden Dome, the F-47 fighter, and the Navy's next-generation fighters, warships, and drones. Qorvo is a beneficiary of new platforms, upgrade cycles, RF content growth, and increases in defense spending. As an example, Golden Dome is a multi-layer defense system that requires significant RF content. For the full fiscal year 2027, sales in D&A markets are expected to total approximately $500 million. In power management, our strategic emphasis on PMIC for enterprise-class SSDs has been met with continued data center growth where customer demand has been very strong. During the quarter, we taped out our first chip for our next-generation enterprise SSD platform. Other power opportunities for Qorvo include AESA radars, drones, robotics, wearables, and smartphones.
Speaker #3: Qorvo is a beneficiary of new platforms, upgrade cycles, RF content growth, and increases in defense spending. As an example, Golden Dome is a multi-layer defense system that requires significant RF content.
Speaker #3: For the full fiscal year '27, sales in DNA markets are expected to [reach/million dollars]. In power management, our strategic emphasis on PMIX for enterprise-class SSDs has been met with continued data center growth, where customer demand has been very strong.
Speaker #3: During the quarter, we taped out our first chip for our next-generation enterprise SSD platform. Other power opportunities for Qorvo include AESA radars, drones, robotics, wearables, and smartphones.
Speaker #3: There is strong interest globally in Qorvo's AESA solutions, combining our FEMs, beamforming ICs, power management, and power control. In infrastructure markets, there are increased content requirements and DOCSIS 4.0 systems that align well with our amplifier and control portfolios.
Robert A. Bruggeworth: There is strong interest globally in Qorvo's AESA solutions combining our FEMS beamforming ICs, power management, and power control. In infrastructure markets, there are increased content requirements in DOCSIS 4.0 systems that align well with our amplifier and control portfolios. Qorvo is a leading supplier of broadband amplifiers for DOCSIS 4.0, and we are well-positioned with all major suppliers. We are also a market leader in small signal receive and transmit components used across the RF chain of 5G radio access network. While these products have historically been deployed in terrestrial 5G infrastructure, we are increasingly seeing the same RF building blocks adopted in adjacent applications such as drones and low Earth orbit satellite communications, including direct-to-cell satellite architectures. We are sharply focused on growing our highest-performing businesses, and we are divesting or exiting businesses that underperform.
There is strong interest globally in Qorvo's AESA solutions combining our FEMS beamforming ICs, power management, and power control. In infrastructure markets, there are increased content requirements in DOCSIS 4.0 systems that align well with our amplifier and control portfolios. Qorvo is a leading supplier of broadband amplifiers for DOCSIS 4.0, and we are well-positioned with all major suppliers. We are also a market leader in small signal receive and transmit components used across the RF chain of 5G radio access network. While these products have historically been deployed in terrestrial 5G infrastructure, we are increasingly seeing the same RF building blocks adopted in adjacent applications such as drones and low Earth orbit satellite communications, including direct-to-cell satellite architectures. We are sharply focused on growing our highest-performing businesses, and we are divesting or exiting businesses that underperform.
Speaker #3: Qorvo is a leading supplier of broadband amplifiers for DOCSIS 4.0, and we are well-positioned with all major suppliers. We're also a market leader in small signal receive and transmit components used across the RF chain of 5G radio access networks.
Speaker #3: While these products have historically been deployed in terrestrial 5G infrastructure, we are increasingly seeing the same RF building blocks adopted in adjacent applications, such as drones and low Earth orbit satellite communications, including direct-to-cell satellite architectures.
Speaker #3: We are sharply focused on growing our highest-performing businesses, and we are divesting or exiting businesses that underperform. In fiscal '27, we forecast a mid-single-digit decline in full-year revenue for the company, as ACG declines and becomes more profitable, CSG is approximately flat, and HPA continues its double-digit growth.
Robert A. Bruggeworth: In fiscal 27, we forecast a mid-single-digit decline in full-year revenue for the company. As ACG declines and becomes more profitable, CSG is approximately flat, and HPA continues its double-digit growth. As we move through fiscal 27, we expect our defense and aerospace business will be larger than our Android business. That's a meaningful shift in the portfolio that reflects both the strategic resizing of our Android business and continued growth in HPA. This increasingly favorable mix positions us to deliver full-year FY27 gross margins above 50% and EPS approaching $7 per share. These outcomes reflect continued operating expense discipline, a structurally improved portfolio mix, and our sustained commitment to innovation and operations excellence. And with that, I'll turn it over to Grant.
In fiscal 27, we forecast a mid-single-digit decline in full-year revenue for the company. As ACG declines and becomes more profitable, CSG is approximately flat, and HPA continues its double-digit growth. As we move through fiscal 27, we expect our defense and aerospace business will be larger than our Android business. That's a meaningful shift in the portfolio that reflects both the strategic resizing of our Android business and continued growth in HPA. This increasingly favorable mix positions us to deliver full-year FY27 gross margins above 50% and EPS approaching $7 per share. These outcomes reflect continued operating expense discipline, a structurally improved portfolio mix, and our sustained commitment to innovation and operations excellence. And with that, I'll turn it over to Grant.
Speaker #3: As we move through fiscal '27, we expect our Defense and Aerospace business will be larger than our Android business. That's a meaningful shift in the portfolio that reflects both the strategic resizing of our Android business and the continued growth in HPA.
Speaker #3: This increasingly favorable mix positions us to deliver full-year FY '27 gross margins above 50%, and EPS approaching $7 per share. These outcomes reflect continued operating expense discipline, a structurally improved portfolio mix, and our sustained commitment to innovation and operational excellence.
Speaker #3: And with that, I'll turn it over to Grant.
Speaker #2: Thanks, Bob, and good afternoon, everyone. Qorvo's fiscal third quarter revenue of $993 million, non-GAAP gross margin of 49.1%, and non-GAAP diluted earnings of $2.17 per share all compared favorably to guidance.
Grant A. Brown: Thanks, Bob, and good afternoon, everyone. Qorvo's fiscal Q3 revenue of $993 million, non-GAAP gross margin of 49.1%, and non-GAAP diluted earnings of $2.17 per share all compared favorably to guidance. During the quarter, our largest customer represented approximately 53% of revenue. On the balance sheet as of quarter end, we held approximately $1.3 billion of cash in equivalents and approximately $1.5 billion of long-term debt outstanding with no near-term maturities. We ended the quarter with a net inventory balance of $530 million. This represents a sequential reduction of $75 million and a decrease of $111 million compared to where we ended last fiscal year. During the quarter, we generated operating cash flow of approximately $265 million and incurred $28 million of capital expenditures, which resulted in free cash flow of $237 million.
Grant A. Brown: Thanks, Bob, and good afternoon, everyone. Qorvo's fiscal Q3 revenue of $993 million, non-GAAP gross margin of 49.1%, and non-GAAP diluted earnings of $2.17 per share all compared favorably to guidance. During the quarter, our largest customer represented approximately 53% of revenue. On the balance sheet as of quarter end, we held approximately $1.3 billion of cash in equivalents and approximately $1.5 billion of long-term debt outstanding with no near-term maturities. We ended the quarter with a net inventory balance of $530 million. This represents a sequential reduction of $75 million and a decrease of $111 million compared to where we ended last fiscal year. During the quarter, we generated operating cash flow of approximately $265 million and incurred $28 million of capital expenditures, which resulted in free cash flow of $237 million.
Speaker #2: During the quarter, our largest customer represented approximately 53% of revenue. On the balance sheet, as of quarter end, we held approximately $1.3 billion of cash and equivalents and approximately $1.3 billion of debt outstanding, with no near-term maturities.
Speaker #2: We ended the quarter with a net inventory balance of $530 million. This represents a sequential reduction of $75 million and a decrease of $111 million compared to where we ended last fiscal year.
Speaker #2: During the quarter, we generated operating cash flow of approximately $265 million and incurred $28 million of capital expenditures, which resulted in free cash flow of $237 million.
Speaker #2: Regarding our outlook for fiscal Q4, our guidance reflects continued momentum in HPA, offset by our strategic pivot from lower margin mass-tier Android and the normal seasonal decline at our largest customer.
Grant A. Brown: Regarding our outlook for fiscal Q4, our guidance reflects continued momentum in HPA, offset by our strategic pivot from lower-margin mass-tier Android and the normal seasonal decline at our largest customer. Our expectations for the March quarter are as follows: revenue of $800 million plus or minus $25 million, non-GAAP gross margin between 48 and 49%, and non-GAAP diluted EPS of $1.20 plus or minus $0.15. Gross margin continues to improve on a year-over-year basis. In Q3, non-GAAP gross margin increased approximately 260 basis points versus last fiscal year, and we expect a similar improvement year-over-year in Q4. This improvement is a direct result of multiple initiatives. We have actively managed our product portfolio and pricing strategies to reduce exposure to mass-tier Android 5G. We've positioned the company to benefit from growth in D&A, which is margin accretive.
Regarding our outlook for fiscal Q4, our guidance reflects continued momentum in HPA, offset by our strategic pivot from lower-margin mass-tier Android and the normal seasonal decline at our largest customer. Our expectations for the March quarter are as follows: revenue of $800 million plus or minus $25 million, non-GAAP gross margin between 48 and 49%, and non-GAAP diluted EPS of $1.20 plus or minus $0.15. Gross margin continues to improve on a year-over-year basis. In Q3, non-GAAP gross margin increased approximately 260 basis points versus last fiscal year, and we expect a similar improvement year-over-year in Q4. This improvement is a direct result of multiple initiatives. We have actively managed our product portfolio and pricing strategies to reduce exposure to mass-tier Android 5G. We've positioned the company to benefit from growth in D&A, which is margin accretive.
Speaker #2: Our expectations for the March quarter are as follows: revenue of $800 million, plus or minus $25 million; non-GAAP gross margin between 48% and 49%; and non-GAAP diluted EPS of $1.20, plus or minus $0.15.
Speaker #2: Gross margin continues to improve on a year-over-year basis. In Q3, non-GAAP gross margin increased approximately 260 basis points versus last fiscal year, and we expect a similar improvement year-over-year in Q4.
Speaker #2: This improvement is a direct result of multiple initiatives. We have actively managed our product portfolio and pricing strategies to reduce exposure to mass-tier Android 5G.
Speaker #2: We've positioned the company to benefit from growth in DNA, which is margin accretive. We've divested or exited margin-diluted businesses, and we continue to manage factory costs aggressively as we have consolidated our manufacturing footprint.
Grant A. Brown: We've divested or exited margin diluted businesses, and we continue to manage factory costs aggressively as we have consolidated our manufacturing footprint. We project non-GAAP operating expenses in the March quarter to be between $240 and $250 million. Below the operating income line, non-operating expenses are expected to be between $8 to $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 expected to be approximately 15%. We continue to monitor the situation as changes to tax policy in the US and internationally may evolve over time. At this time, please open the line for questions. Thank you.
We've divested or exited margin diluted businesses, and we continue to manage factory costs aggressively as we have consolidated our manufacturing footprint. We project non-GAAP operating expenses in the March quarter to be between $240 and $250 million. Below the operating income line, non-operating expenses are expected to be between $8 to $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 expected to be approximately 15%. We continue to monitor the situation as changes to tax policy in the US and internationally may evolve over time. At this time, please open the line for questions. Thank you.
Speaker #2: We project non-GAAP operating expenses in the March quarter to be between $240 and $250 million. Below the operating income line, non-operating expenses are expected to be between $8 to $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.
Speaker #2: Our non-GAAP tax rate for fiscal ’26 is expected to be approximately 15%. We continue to monitor the situation as changes to tax policy in the U.S.
Speaker #2: and internationally may evolve over time. At this time, please open the line for questions. Thank you.
Speaker #3: We will now begin the question-and-answer session. To ask a question, you may press star, then one, on your touch-tone phone. If you're using a speakerphone, please pick up your handset before pressing the keys.
Operator: We will now begin the question and answer session. To ask a question, you may press star then one on your touch-tone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. Please limit yourself to one question and one follow-up. At this time, we will pause momentarily to assemble our queue. The first question comes from Thomas O'Malley with Barclays. Please go ahead.
Operator: We will now begin the question and answer session. To ask a question, you may press star then one on your touch-tone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. Please limit yourself to one question and one follow-up. At this time, we will pause momentarily to assemble our queue. The first question comes from Thomas O'Malley with Barclays. Please go ahead.
Speaker #3: If at any time your question has been addressed and you would like to withdraw your question, please press star, then two. Please limit yourself to one question and one follow-up.
Speaker #3: At this time, we will pause momentarily to assemble our queue. The first question comes from Thomas O'Malley with Barclays. Please go ahead.
Speaker #4: Hey, guys. Thanks for taking my question. So thanks for the color on the content. I think, Bob, you mentioned the ultra high band potentially not having as much content there in this generation, but you have some of the ET coming back in.
[Analyst] (Barclays): Hey, guys. Thanks for taking my question. So thanks for the color on the content. I think, Bob, you mentioned the ultra-high band potentially not having as much content there in this generation, but you have some of the ET coming back in. If you look at the next several generations of content, it looks like with this dual sourcing, you've seen a lot more swimming in other people's lanes is the way I think I've heard it talked about in the past, where one guy would compete in a couple of sockets, and now you've seen that proliferating to some other sockets, which has just kind of increased the competition, and you guys have called out a couple of areas where you're seeing that. Maybe talk about the content roadmap on a go-forward basis. Do you think that there are other sockets?
Thomas O'Malley: Hey, guys. Thanks for taking my question. So thanks for the color on the content. I think, Bob, you mentioned the ultra-high band potentially not having as much content there in this generation, but you have some of the ET coming back in. If you look at the next several generations of content, it looks like with this dual sourcing, you've seen a lot more swimming in other people's lanes is the way I think I've heard it talked about in the past, where one guy would compete in a couple of sockets, and now you've seen that proliferating to some other sockets, which has just kind of increased the competition, and you guys have called out a couple of areas where you're seeing that. Maybe talk about the content roadmap on a go-forward basis. Do you think that there are other sockets?
Speaker #4: If you look at the next several generations of content, it looks like with this dual sourcing you've seen a lot more swimming in other people's lanes, is the way I think I've heard it talked about in the past, where one guy would compete in a couple sockets, and now you've seen that proliferating to some other sockets, which has just kind of increased the competition. And you guys have called out a couple areas where you're seeing that.
Speaker #4: Maybe talk about the content roadmap on a go-forward basis. Do you think that there are other sockets? You obviously talked about the high band or the mid-high band and the iPads.
[Analyst] (Barclays): You obviously talked about the high band or the mid-high band and the iPads. Do you see other sockets where you could have some more traction, or do you feel like the wind's behind you or in front of you in terms of content over the next several generations? Thank you.
You obviously talked about the high band or the mid-high band and the iPads. Do you see other sockets where you could have some more traction, or do you feel like the wind's behind you or in front of you in terms of content over the next several generations? Thank you.
Speaker #4: Do you see other sockets where you could have some more traction, or do you feel like the wind's behind you or in front of you in terms of content over the next several generations?
Speaker #4: Thank you.
Speaker #5: Yeah, thanks a lot. Appreciate the question, Tom. And as you know, we don't like to comment on future generations or even architectures, but I will say that there continues to be opportunity for us to continue to grow our footprint there, no doubt about it.
David Fullwood: Yeah, thanks a lot. Appreciate the question, Tom. And as you know, we don't like to comment on future generations or even architectures, but I will say that there continues to be opportunity for us to continue to grow our footprint there, no doubt about it. As you know, a lot of it was sole source. As you can see, it does appear they're multi-sourcing more, or at least dual sourcing, I should say, more sockets in the future. And we're investing in R&D to continue to grow at our largest customer.
David Fullwood: Yeah, thanks a lot. Appreciate the question, Tom. And as you know, we don't like to comment on future generations or even architectures, but I will say that there continues to be opportunity for us to continue to grow our footprint there, no doubt about it. As you know, a lot of it was sole source. As you can see, it does appear they're multi-sourcing more, or at least dual sourcing, I should say, more sockets in the future. And we're investing in R&D to continue to grow at our largest customer.
Speaker #5: It's been, as you know, a lot of it was sole source. As you can see, it does appear they are multi-sourcing more, or at least dual sourcing.
Speaker #5: I should say more sockets in the future. And we're investing in R&D to continue to grow at our largest customer.
Speaker #4: Helpful. And then, just a clarification on the second one. I think you mentioned into March, Android would be down more than seasonal. I'm sure there are a million different ways—5, 10, 15 years—you can look at seasonal, but in terms of what I have here, Android is actually up in the March quarter.
[Analyst] (Barclays): Helpful. Then just a clarification on the second one. I think you mentioned into March, Android would be down more than seasonal. I'm sure there's a million different ways, 5, 10, 15 years you can look at seasonal. But in terms of what I have here, Android is actually up in the March quarter. I know you've seen some different seasonality. What do you mean by down more than seasonal? What is normal seasonal for March in Android?
Thomas O'Malley: Helpful. Then just a clarification on the second one. I think you mentioned into March, Android would be down more than seasonal. I'm sure there's a million different ways, 5, 10, 15 years you can look at seasonal. But in terms of what I have here, Android is actually up in the March quarter. I know you've seen some different seasonality. What do you mean by down more than seasonal? What is normal seasonal for March in Android?
Speaker #4: I know you've seen some different seasonality. What do you mean by 'down more than seasonal'? What is normal seasonality for March in Android?
Speaker #5: Yeah, I appreciate the question, Tom, and you're exactly right. Typically, Android has been up in the March quarter, and as we've been strategically exiting a lot of that lower-margin business—and we talked last quarter about even some of the Android ramps in other phones that we're not participating as much.
David Fullwood: Yeah, I appreciate the question, Tom, and you're exactly right. Typically, Android has been up in the March quarter, and as we've been strategically exiting a lot of that lower margin business, and we talked last quarter about even some of the Android ramps and other phones that we're not participating as much, again, due to our strategic emphasis on making sure we're getting paid for the value we bring. And this year, it's going to be down quarter-over-quarter. So that's the big swing. You're correct.
David Fullwood: Yeah, I appreciate the question, Tom, and you're exactly right. Typically, Android has been up in the March quarter, and as we've been strategically exiting a lot of that lower margin business, and we talked last quarter about even some of the Android ramps and other phones that we're not participating as much, again, due to our strategic emphasis on making sure we're getting paid for the value we bring. And this year, it's going to be down quarter-over-quarter. So that's the big swing. You're correct.
Speaker #5: Again, due to our strategic emphasis on making sure we're getting paid for the value we bring, and this year it's going to be down quarter over quarter.
Speaker #5: So that's the big swing. You're correct.
Speaker #3: The next question comes from Peter Peng with JP Morgan. Please go ahead.
Operator: The next question comes from Peter Peng with JPMorgan. Please go ahead.
Operator: The next question comes from Peter Peng with JPMorgan. Please go ahead.
Speaker #3: ahead. Are you there,
[Analyst] (JPMorgan): Hey there, Peter.
Grant A. Brown: Hey there, Peter.
Speaker #6: Peter? Oh, hi.
Grant A. Brown: Oh, hi. Hi. Thanks for taking my question. Just for the Android business, I think the prior expectation was you're going to exit by about $200 million, and now you guys are saying $300 million. So maybe just talk about whether that is just expedite exit, is it the memory impact, what drove the accelerated pace, and then as we think about longer term, what is the business revenue run rate after you're finishing exiting on this business?
Peter Peng: Oh, hi. Hi. Thanks for taking my question. Just for the Android business, I think the prior expectation was you're going to exit by about $200 million, and now you guys are saying $300 million. So maybe just talk about whether that is just expedite exit, is it the memory impact, what drove the accelerated pace, and then as we think about longer term, what is the business revenue run rate after you're finishing exiting on this business?
Speaker #7: Hi, thanks for taking my question. Just for the Android business, I think the prior expectation was you were going to exit by about $200 million, and now you guys are saying $300 million.
Speaker #7: So maybe just talk about whether that is just expedited exit. Is it the memory impact? What drove the accelerated pace? And then, as we think about longer term, what is the business revenue run rate after you're finished exiting all these businesses?
Speaker #6: Hey, Peter, this is Grant. Let me take that one, and then Dave can fill in some more detail. So, we had said that it will be a multi-year event as we exit the lower margin, or lower-tier, Android businesses.
[Analyst] (JPMorgan): Hey, Peter. This is Grant. Let me take that one, and then Dave can fill in some more detail. So we had said that it'll be a multi-year event as we exit the lower margin or lower-tier Android businesses. It could run approximately $150 to $200 million in our fiscal 2026 and then again in our fiscal 2027. Last quarter, we had mentioned that we expected the larger portion of that in our fiscal 2026 to hit in the second half and especially impacting the March quarter, and that's exactly what we're seeing in results. And then in fiscal 2027, instead of the $150 to $200 million, we're taking that estimate up to $300 million that we could exit in fiscal 2027, and that's both due to our strategic exit from the business as well as some of the memory pricing and availability constraints that are impacting customers' build plans.
Grant A. Brown: Hey, Peter. This is Grant. Let me take that one, and then Dave can fill in some more detail. So we had said that it'll be a multi-year event as we exit the lower margin or lower-tier Android businesses. It could run approximately $150 to $200 million in our fiscal 2026 and then again in our fiscal 2027. Last quarter, we had mentioned that we expected the larger portion of that in our fiscal 2026 to hit in the second half and especially impacting the March quarter, and that's exactly what we're seeing in results. And then in fiscal 2027, instead of the $150 to $200 million, we're taking that estimate up to $300 million that we could exit in fiscal 2027, and that's both due to our strategic exit from the business as well as some of the memory pricing and availability constraints that are impacting customers' build plans.
Speaker #6: It could run approximately $150 million to $200 million in our fiscal '26, and then again in our fiscal '27. Last quarter, we had mentioned that we expected the larger portion of that in our fiscal '26 to hit in the second half, and especially impact the March quarter.
Speaker #6: And that's exactly what we're seeing in results. And then in fiscal '27, instead of the $150 to $200 million, we're taking that estimate up to $300 million that we could exit in fiscal '27.
Speaker #6: And that's both due to our strategic exit from the business, as well as some of the memory pricing and availability constraints that are impacting customers' build plans.
Speaker #7: Perfect. And then just on the gross margin, you talked about potentially getting to the 50%. Maybe you can kind of lay it out on how we should think about that margin profile over the course of 2027.
Grant A. Brown: Perfect. And then just on the gross margin, you talked about potentially getting to the 50%. Maybe you can kind of lay it out on how we should think about that margin profile over the course of the 2027?
Peter Peng: Perfect. And then just on the gross margin, you talked about potentially getting to the 50%. Maybe you can kind of lay it out on how we should think about that margin profile over the course of the 2027?
Speaker #5: Peter, we're getting a lot of background noise when we're talking. I don't know if it's on your end or not.
David Fullwood: Peter, we're getting a lot of background noise when we're talking. I don't know if it's on your end or not.
David Fullwood: Peter, we're getting a lot of background noise when we're talking. I don't know if it's on your end or not.
Grant A. Brown: Let me hear you.
Peter Peng: Let me hear you.
David Fullwood: Sure. So I think your question was around margin profile. So as we look out into fiscal 2027?
David Fullwood: Sure. So I think your question was around margin profile. So as we look out into fiscal 2027?
Speaker #6: Around margin profile—so, sure. I think your question was, as we look out into fiscal...
Speaker #6: '27? That is right.
Grant A. Brown: That is right. That is right.
Peter Peng: That is right. That is right.
Speaker #7: That is right.
Speaker #6: Okay. Yeah. So the biggest driver for margin as we look out in fiscal ’27 is mix. That’s both business mix, as HPA becomes a larger percentage of the total—which is margin-accretive—as well as product mix inside of the segments.
David Fullwood: Okay. Yeah. So the biggest driver for margin as we look out in fiscal 2027 is mix. That's both business mix as HPA becomes a larger percentage of the total, which is margin accretive, as well as product mix inside of the segments, especially within ACG. We've talked at length about the exit from the lower-tier Android business, which is having a sizable effect. Obviously, our utilizations aren't where we'd like them to be, but the biggest gains in gross margin for the moment are coming from that business mix I talked about. So there's still further headroom as we add additional volumes over time. I would compliment the operations team.
David Fullwood: Okay. Yeah. So the biggest driver for margin as we look out in fiscal 2027 is mix. That's both business mix as HPA becomes a larger percentage of the total, which is margin accretive, as well as product mix inside of the segments, especially within ACG. We've talked at length about the exit from the lower-tier Android business, which is having a sizable effect. Obviously, our utilizations aren't where we'd like them to be, but the biggest gains in gross margin for the moment are coming from that business mix I talked about. So there's still further headroom as we add additional volumes over time. I would compliment the operations team.
Speaker #6: Especially within ACG, we've talked at length about the exit from the lower-tier Android business, which is having a sizable effect. Obviously, our utilizations aren't where we'd like them to be, but the biggest gains in gross margin for the moment are coming from that business mix I talked about.
Speaker #6: So there's still further headroom as we add additional volumes over time. I would compliment the operations team. They've done a considerable job of pulling costs out while maintaining the capacity that we need.
David Fullwood: They've done a considerable job of pulling costs out while maintaining the capacity that we need to strategically target very important pieces of business, all while transferring multiple lines of production, which is not a small feat, as Bob commented earlier, both on Costa Rica as well as the North Carolina transition to Texas.
They've done a considerable job of pulling costs out while maintaining the capacity that we need to strategically target very important pieces of business, all while transferring multiple lines of production, which is not a small feat, as Bob commented earlier, both on Costa Rica as well as the North Carolina transition to Texas.
Speaker #6: To strategically target very important pieces of business, all while transferring multiple lines of production—which is not a small feat, as Bob commented earlier.
Speaker #6: Both on Costa Rica as well as the North Carolina transition to
Speaker #7: Thank you, guys.
Grant A. Brown: Thank you, guys.
Peter Peng: Thank you, guys.
Speaker #3: The next question comes from Gary Mobley with Loop Capital. Please go ahead.
Operator: The next question comes from Gary Mobley with Loop Capital. Please go ahead.
Operator: The next question comes from Gary Mobley with Loop Capital. Please go ahead.
Speaker #3: ahead. Hey,
Grant A. Brown: Hey, guys. Thanks for taking my question. Thanks for the explicit guidance, Bob, for fiscal year 2027 and specifically on Apple. We're calling for revenue to be flat in fiscal year 2027 with perhaps some content loss in the upcoming iPhone 18 in aggregate. So is that more or less one-part volume growth offset equally by some content decline? Maybe you can just help us out there in terms of your volume assumption for iPhone units, that assumption.
Gary Mobley: Hey, guys. Thanks for taking my question. Thanks for the explicit guidance, Bob, for fiscal year 2027 and specifically on Apple. We're calling for revenue to be flat in fiscal year 2027 with perhaps some content loss in the upcoming iPhone 18 in aggregate. So is that more or less one-part volume growth offset equally by some content decline? Maybe you can just help us out there in terms of your volume assumption for iPhone units, that assumption.
Speaker #7: Guys, thanks for taking my question, and thanks for the explicit guidance, Bob, for fiscal year '27 and specifically on Apple. You're calling for revenue to be flat in fiscal year '27, with perhaps some content loss in the upcoming iPhone 18 in aggregate.
Speaker #7: So is that more or less one part volume growth offset equally by some content decline? Maybe you can just help us out there in terms of your volume assumption for iPhone.
Speaker #7: units with that assumption. Yeah.
Speaker #5: Thanks, Gary. And we're not going to comment on our largest customers' volumes or expectations. We're just giving you an indication of what we think our revenue is going to be, given everything we know at this time.
David Fullwood: Yeah. Thanks, Gary. We're not going to comment on our largest customers' volumes or expectations. We're just giving you an indication of what we think our revenue is going to be given everything we know at this time.
David Fullwood: Yeah. Thanks, Gary. We're not going to comment on our largest customers' volumes or expectations. We're just giving you an indication of what we think our revenue is going to be given everything we know at this time.
Speaker #7: Got it, got it. Okay. And then looking at your fourth quarter revenue guide, it's down about $70 million, roughly, on a year-over-year basis. How much of that decrease is a function of business divestments? I believe there might be two significant business divestments within that year-over-year comparison?
Grant A. Brown: Got it. Got it. Okay. Then looking at your Q4 revenue guide, it's down about $70 million, roughly, on a year-over-year basis. How much of that decrease is a function of business divestments? I believe there might be two significant business divestments within that year-over-year comparison, and I would assume the rest is mostly Android-related.
Gary Mobley: Got it. Got it. Okay. Then looking at your Q4 revenue guide, it's down about $70 million, roughly, on a year-over-year basis. How much of that decrease is a function of business divestments? I believe there might be two significant business divestments within that year-over-year comparison, and I would assume the rest is mostly Android-related.
Speaker #7: And I would assume the rest is mostly Android-related.
Speaker #6: That's correct. The vast majority of it is Android-related. It's relatively small from the divestitures that we've made. And the Android component of that—obviously, we'll see how that exactly plays out.
David Fullwood: That's correct. The vast majority of it is Android-related. It's relatively small from the divestitures that we've made. And the Android component of that, obviously, we'll see how that exactly plays out. We're seeing both our strategic exit as well as some of the customer forecast driven by some memory pricing concerns, which is just starting to find its way into the customer dialogue.
David Fullwood: That's correct. The vast majority of it is Android-related. It's relatively small from the divestitures that we've made. And the Android component of that, obviously, we'll see how that exactly plays out. We're seeing both our strategic exit as well as some of the customer forecast driven by some memory pricing concerns, which is just starting to find its way into the customer dialogue.
Speaker #6: We're seeing both our strategic exit, as well as some of the customer forecast, driven by some memory pricing concerns, which are just starting to find their way into the customer dialogue.
Speaker #7: Got it. Thank you, guys.
Grant A. Brown: Got it. Thank you, guys.
Gary Mobley: Got it. Thank you, guys.
Speaker #3: The next question comes from Christopher Roland with Susquehanna. Please go ahead.
Operator: The next question comes from Christopher Rolland with Susquehanna. Please go ahead.
Operator: The next question comes from Christopher Rolland with Susquehanna. Please go ahead.
Speaker #8: Thanks
Christopher Adam Jackson Rolland: Thanks so much for the question. So I think previously you guys were quite optimistic around integrated modules and ramping integrated modules. Obviously, this dual sourcing is a setback, but perhaps if you can talk about your products here, how you feel about them, and how you feel about your prospects moving forward, particularly for integrated modules.
Christopher Adam Jackson Rolland: Thanks so much for the question. So I think previously you guys were quite optimistic around integrated modules and ramping integrated modules. Obviously, this dual sourcing is a setback, but perhaps if you can talk about your products here, how you feel about them, and how you feel about your prospects moving forward, particularly for integrated modules.
Speaker #8: So much for the ahead question. So, I think previously you guys were quite optimistic around integrated modules and ramping integrated modules. Obviously, this dual sourcing is a setback.
Speaker #8: But perhaps if you can talk about your products here—how you feel about them, and how you feel about your prospects moving forward, particularly for integrated modules.
David Fullwood: Yeah. And Gary, just to be clear, the ultra-high band has been a dual-sourced part for many, many years, probably five or six years. We've always had content in it. We just have less this year than prior years. And I talked about the high-band pad, and that's an area we hadn't been, so the dual sourcing is actually helping us in that case. So that's how I'd actually answer your question.
David Fullwood: Yeah. And Chris, just to be clear, the ultra-high band has been a dual-sourced part for many, many years, probably five or six years. We've always had content in it. We just have less this year than prior years. And I talked about the high-band pad, and that's an area we hadn't been, so the dual sourcing is actually helping us in that case. So that's how I'd actually answer your question.
Speaker #5: Been a dual-sourced part for Gary. Just to be clear, the ultra high band has many, many years—probably five or six years—we've always had content in it.
Speaker #5: We just have less this year than prior years. And I talked about the high band pad, and that's an area we hadn't been. So the dual sourcing is actually helping us in that case.
Speaker #5: So that's how it actually answered your question.
Speaker #5: question.
[Analyst] (JPMorgan): Okay. Maybe, Gary, in terms of revenue, maybe there's always a considerable number of variables to consider in addition to content gains and losses, including the timing of certain different awards as well as the volume of specific SKUs, the mix, launch cadence across those models. But at least from a modeling perspective, in terms of our assumptions, I think the key point is that all of our underlying assumptions are fully reflected in the fiscal 2027 outlook that Bob provided earlier.
Peter Peng: Okay. Maybe, Gary, in terms of revenue, maybe there's always a considerable number of variables to consider in addition to content gains and losses, including the timing of certain different awards as well as the volume of specific SKUs, the mix, launch cadence across those models. But at least from a modeling perspective, in terms of our assumptions, I think the key point is that all of our underlying assumptions are fully reflected in the fiscal 2027 outlook that Bob provided earlier.
Speaker #6: Maybe, Gary. In terms of revenue, maybe there's always a considerable number of variables to consider in addition to content—gains and losses, including the timing of certain different awards, as well as the volume of specific SKUs, the mix, and launch cadence across those models.
Speaker #6: But at least from a modeling perspective, in terms of our assumptions, I think the key point is that all of our underlying assumptions are fully reflected in the fiscal '27 outlook that Bob provided earlier.
Speaker #5: Thanks, Chris.
David Fullwood: Thanks, Chris.
David Fullwood: Thanks, Chris.
Speaker #7: And sorry, me. Yeah. And just maybe following up there—you did have some comments about not being, I think, totally decided for the year. But it sounds like you guys have pretty good visibility here, and we probably shouldn't be expecting any more surprises, either positive or negative, versus your flat guide year-over-year.
Grant A. Brown: Yeah. And sorry, me.
Grant A. Brown: Yeah. And sorry, me.
Christopher Adam Jackson Rolland: Yeah. And just maybe following up there, you did have some comments about not being, I think, totally decided for the year, but it sounds like you guys have pretty good visibility here, and we probably shouldn't be expecting any more surprises, either positive or negative, versus your flat guide year-over-year. Is that fair?
Christopher Adam Jackson Rolland: Yeah. And just maybe following up there, you did have some comments about not being, I think, totally decided for the year, but it sounds like you guys have pretty good visibility here, and we probably shouldn't be expecting any more surprises, either positive or negative, versus your flat guide year-over-year. Is that fair?
Speaker #7: Is that fair?
Speaker #6: Yeah, that's fair. There are always certain components, particularly around tuners, that are awarded later in the cycle, but yeah, everything's kind of reflected in the guide that Bob gave.
Speaker #6: Yeah, that's fair. There are always certain components, particularly around tuners, that are awarded later in the cycle, but yeah, everything's kind of reflected in the guide that Bob gave.
[Analyst] (JPMorgan): Yeah, that's fair. There's always certain components, particularly around tuners, that are awarded later in the cycle, but yeah, everything's kind of reflected in the guide that Bob gave.
Peter Peng: Yeah, that's fair. There's always certain components, particularly around tuners, that are awarded later in the cycle, but yeah, everything's kind of reflected in the guide that Bob gave.
Speaker #7: Excellent. Thank you,
Christopher Adam Jackson Rolland: Excellent. Thank you, guys.
Christopher Adam Jackson Rolland: Excellent. Thank you, guys.
Speaker #7: guys. Thanks,
[Analyst] (JPMorgan): Thanks, Chris.
Peter Peng: Thanks, Chris.
Speaker #3: The next question comes from Chris Sankar with TD Cowen. Please go ahead.
Operator: The next question comes from Krish Sankar with TD Cowen. Please go ahead.
Operator: The next question comes from Krish Sankar with TD Cowen. Please go ahead.
Speaker #8: Hello. This is Robert Mertens on the line for Chris Sankar. Thanks for taking my questions. You mentioned that Android sales are expected to decline roughly 300 million next year.
Grant A. Brown: Hello. This is Robert Mertens on the line for Krish Sankar. Thanks for taking my questions. You mentioned that Android sales are expected to decline roughly $300 million next year and walked us through how the exiting of the low-end space will impact the business. But could you just walk us through a little bit more about how the current higher memory prices and costs are affecting your mobile business and how you think that might play out next year?
Grant A. Brown: Hello. This is Robert Mertens on the line for Krish Sankar. Thanks for taking my questions. You mentioned that Android sales are expected to decline roughly $300 million next year and walked us through how the exiting of the low-end space will impact the business. But could you just walk us through a little bit more about how the current higher memory prices and costs are affecting your mobile business and how you think that might play out next year?
Speaker #8: And walk us through how the exiting of the low-end space will impact the business. But could you just walk us through a little bit more about how the current higher memory prices and costs are affecting your mobile business, and how you think that might play out next?
Speaker #8: year?
Speaker #6: Yeah. This
[Analyst] (JPMorgan): Yeah, this is Dave. Yeah. So that decline we're talking about is primarily as a result of the ongoing intentional resizing of the Android business that we've been talking about for almost a year now. Secondarily, what we're seeing related to the memory pricing and availability as OEMs adjust their build plans to react to that, it definitely pressures the MAF tier as customers prioritize the supply that they get towards the higher-end devices. So this has an acceleration effect on our strategy, but it really doesn't change the end result. But that's why you're seeing the higher $300 million decline that we called out for FY 27 versus what we had called out earlier.
Peter Peng: Yeah, this is Dave. Yeah. So that decline we're talking about is primarily as a result of the ongoing intentional resizing of the Android business that we've been talking about for almost a year now. Secondarily, what we're seeing related to the memory pricing and availability as OEMs adjust their build plans to react to that, it definitely pressures the MAF tier as customers prioritize the supply that they get towards the higher-end devices. So this has an acceleration effect on our strategy, but it really doesn't change the end result. But that's why you're seeing the higher $300 million decline that we called out for FY 27 versus what we had called out earlier.
Speaker #6: This is Dave. Yeah, so that decline we're talking about is primarily as a result of the ongoing intentional resizing of the Android business that we've been talking about for almost a year now.
Speaker #6: Secondarily, what we're seeing related to the memory pricing and availability is OEMs adjust their build plans to react to that. It definitely pressures the mid-tier as customers prioritize the supply that they get towards the higher-end devices.
Speaker #6: So this has an acceleration effect on our strategy, but it really doesn't change the end result. But that's why you're seeing the higher $300 million decline that we called out for FY '27 versus what we had called out earlier.
Speaker #7: And maybe I'll just add to that a little bit, Dave, as far as the profile of our revenue throughout the year. As you start to think past March and into June, the dynamic that Dave was describing will play out.
David Fullwood: And maybe I'll just add to that a little bit, Dave, as far as the profile of our revenue throughout the year. As you start to think past margin into June, the dynamic that Dave was describing will play out. It's a little too early to put too fine a point on it since we only guide in any detailed way for the next quarter. But it's worth pointing out that historical seasonality, even in June, say, down 5% to 10% sequentially, no longer applies for the reasons we mentioned and the strategic actions around Android, strategically managing down our Android exposure in the MAF tier, as well as a seasonal downtick in our revenues from our largest customer. Normally, those would offset, and we're not going to see that. We hadn't seen it in March. We won't see it in June.
David Fullwood: And maybe I'll just add to that a little bit, Dave, as far as the profile of our revenue throughout the year. As you start to think past margin into June, the dynamic that Dave was describing will play out. It's a little too early to put too fine a point on it since we only guide in any detailed way for the next quarter. But it's worth pointing out that historical seasonality, even in June, say, down 5% to 10% sequentially, no longer applies for the reasons we mentioned and the strategic actions around Android, strategically managing down our Android exposure in the MAF tier, as well as a seasonal downtick in our revenues from our largest customer. Normally, those would offset, and we're not going to see that. We hadn't seen it in March. We won't see it in June.
Speaker #7: It's a little too early to put too fine a point on it, since we only guide in any detailed way for the next quarter.
Speaker #7: But it's worth pointing out that historical seasonality, even in June—say, down 5% to 10% for reasons we're mentioning and the strategic sequentially—no longer applies for the actions around Android.
Speaker #7: Strategically managing down our Android exposure in the math tier, as well as a seasonal downtick in our revenues from our largest customer. Normally, those would offset, and we're not going to see that.
Speaker #7: We hadn't seen it in March. We won't see it in June. And then, secondarily, as we've talked about our DNA business, on a year-over-year basis, we continue to see considerable strength there.
David Fullwood: And then secondarily, as we've talked about our D&A business, on a year-over-year basis, we continue to see a considerable strength there, but it'll be down as we look into June, which is pretty typical coming off of a very strong March. So as D&A has grown to be a larger contributor to our top line, the impact on June seasonality has also grown. So the profile of our business will change because of, to a large degree, the Android exit as we were communicating earlier.
David Fullwood: And then secondarily, as we've talked about our D&A business, on a year-over-year basis, we continue to see a considerable strength there, but it'll be down as we look into June, which is pretty typical coming off of a very strong March. So as D&A has grown to be a larger contributor to our top line, the impact on June seasonality has also grown. So the profile of our business will change because of, to a large degree, the Android exit as we were communicating earlier.
Speaker #7: But it'll be down as we look into June, which is pretty typical coming off of a very strong March. So as DNA has grown to be a larger contributor to our top line, the impact on June seasonality has also grown.
Speaker #7: So the profile of our business will change because of, to a large degree, the Android exit, as we were communicating earlier. Got it. Thank you.
Grant A. Brown: Got it. Thank you. That's helpful and makes sense for customers to prioritize the higher end. Just real quick, in line with that, are you seeing any sort of changes in terms of inventory level at customers or this in line or higher or lower than what you would typically expect at this time of year?
Grant A. Brown: Got it. Thank you. That's helpful and makes sense for customers to prioritize the higher end. Just real quick, in line with that, are you seeing any sort of changes in terms of inventory level at customers or this in line or higher or lower than what you would typically expect at this time of year?
Speaker #7: That's helpful and makes sense for our customers to prioritize the higher end. Just real quick, in line with that, are you seeing any sort of changes in terms of inventory levels at customers, or is this in line, higher, or lower than what you would typically expect at this time of year?
Speaker #6: Yeah, I wouldn't say we've seen anything abnormal as it relates to inventory. It's just more of a reaction to how they're adjusting their build plans given the situation that's going on with the memory.
[Analyst] (JPMorgan): Yeah. I wouldn't say we've seen anything abnormal as it relates to inventory. It's just more of a reaction to how they're adjusting their build plans given the situation that's going on with the memory.
Peter Peng: Yeah. I wouldn't say we've seen anything abnormal as it relates to inventory. It's just more of a reaction to how they're adjusting their build plans given the situation that's going on with the memory.
Speaker #7: Okay. Thank you.
Grant A. Brown: Okay. Thank you.
Grant A. Brown: Okay. Thank you.
Speaker #3: The next question comes from Edward Snyder with Charter Equity Research. Please go ahead.
Operator: The next question comes from Edward Snyder with Charter Equity Research. Please go ahead, sir.
Operator: The next question comes from Edward Snyder with Charter Equity Research. Please go ahead, sir.
Speaker #5: Thank you very
Speaker #5: Thank you very much. Bob, you said you'd have lower share in the high band. Obviously, the iPad isn't going to be a big driver for unit volume.
David Fullwood: Thank you very much. Bob, you said you'd have lower share in the high band. Obviously, the iPad isn't going to be a big driver for unit volume, but the mix should favor your ET, and that's like $1.80 extra content. And apparently, that's going to be a significant shift given that we saw last year versus what we saw this year. So doesn't this imply that you're seeing significant share loss in ultra-high band, or are there other parts that we don't know that you haven't mentioned that you're not going to be on in the new phone? I know Dave talked about tuners that always get added towards the end of it, but plus or minus on that isn't going to be, I wouldn't think, correct me if I'm wrong, I wouldn't think you're in the dollar range of content.
David Fullwood: Thank you very much. Bob, you said you'd have lower share in the high band. Obviously, the iPad isn't going to be a big driver for unit volume, but the mix should favor your ET, and that's like $1.80 extra content. And apparently, that's going to be a significant shift given that we saw last year versus what we saw this year. So doesn't this imply that you're seeing significant share loss in ultra-high band, or are there other parts that we don't know that you haven't mentioned that you're not going to be on in the new phone? I know Dave talked about tuners that always get added towards the end of it, but plus or minus on that isn't going to be, I wouldn't think, correct me if I'm wrong, I wouldn't think you're in the dollar range of content.
Speaker #5: But the mix will favor your ET, and that's like $1.80 extra content. And apparently, that's going to be a significant shift, given what we saw last year versus what we saw this year.
Speaker #5: So, doesn't this imply that you're seeing significant share loss in ultra high band, or are there other parts that we don't know, that you haven't mentioned, that you're not going to be on in the new phone?
Speaker #5: I know Dave talked about tuners that always get added towards the end of it, but plus or minus on that isn't going to be—I wouldn't take—correct me if I'm wrong.
Speaker #5: I wouldn’t think you’re in the dollar range of content. So I’m just trying to get my arms around this shift, because the wind should be at your back in the fall just for ET itself, and it doesn’t sound like that’s the case at all.
David Fullwood: So I'm just trying to get my arms around this shift because the wind should be at your back in the fall just for ET itself, and it doesn't sound like that's the case at all.
David Fullwood: So I'm just trying to get my arms around this shift because the wind should be at your back in the fall just for ET itself, and it doesn't sound like that's the case at all.
Speaker #6: Yeah. Hey, this is Frank Stewart. Maybe just to reiterate, the things that we're excited about is the high band pad win that we got, the head win that we of share in UHB working very have, is the loss hard to get that back in the following generation.
Robert A. Bruggeworth: Yeah. Hey, Ed, this is Frank Stewart. Maybe just to reiterate, the things that we're excited about are the high-band PAD win that we got. The headwind that we have is the loss of share in UHB, working very hard to get that back in the following generation. We agree that as the internal modem is used on more SKUs, that is a tailwind for us. When you put it all together, together with all of our estimates of how all that plays out, again, we can only talk to our expectations for revenue. When you play that out over our fiscal year, it comes together with about flat year-over-year.
Robert A. Bruggeworth: Yeah. Hey, Ed, this is Frank Stewart. Maybe just to reiterate, the things that we're excited about are the high-band PAD win that we got. The headwind that we have is the loss of share in UHB, working very hard to get that back in the following generation. We agree that as the internal modem is used on more SKUs, that is a tailwind for us. When you put it all together, together with all of our estimates of how all that plays out, again, we can only talk to our expectations for revenue. When you play that out over our fiscal year, it comes together with about flat year-over-year.
Speaker #6: We agree that as the internal modem is used on more SKUs, that is a tailwind for us. When you put it all together, together with all of our estimates of how all that plays out, again, we can only talk to our expectations for revenue.
Speaker #6: When you play that out over our fiscal year, it comes together with about flat year-over-year.
Speaker #5: Okay. I just wanted to make sure we had all the moving parts fit together. But you're still going to be in the ultra-high band users in the C lower share.
David Fullwood: Okay. I just wanted to make sure we had all the moving parts put together, but you're still going to be in the ultra-high band. You're just going to see lower share. You're not going to keep out of that.
David Fullwood: Okay. I just wanted to make sure we had all the moving parts put together, but you're still going to be in the ultra-high band. You're just going to see lower share. You're not going to keep out of that.
Speaker #5: You're not going to keep out of that all.
Robert A. Bruggeworth: Yeah. That's right. That's right.
Robert A. Bruggeworth: Yeah. That's right. That's right.
Speaker #6: That's right. That's right.
Speaker #5: Right. I just want to circle the case. And then, Grant, under utilization charges, it sounds like—especially if you're going to be flat, etc.—did you incur any this quarter, and do you expect many coming up here?
David Fullwood: All right. Yeah. I just want to make sure that's clear. And then Grant, under utilization charges, it sounds like, especially if you're going to be flat, etc., did you incur any this quarter? Do you expect any coming up here? And is that mostly GaAs at this stage? Because I know you're going to be shipping more BAW because I know you guys called the high band historically has been called the mid-high band, uses a lot of BAW. Does it use a lot of BAW? I mean, you're going into it for product here, so maybe it doesn't, actually. Maybe you don't even have nearly the number of bands you have to deal with before. So one, under utilization charges, and two, have things improved utilization-wise in BAW, or do you anticipate they'll improve this year?
David Fullwood: All right. Yeah. I just want to make sure that's clear. And then Grant, under utilization charges, it sounds like, especially if you're going to be flat, etc., did you incur any this quarter? Do you expect any coming up here? And is that mostly GaAs at this stage? Because I know you're going to be shipping more BAW because I know you guys called the high band historically has been called the mid-high band, uses a lot of BAW. Does it use a lot of BAW? I mean, you're going into it for product here, so maybe it doesn't, actually. Maybe you don't even have nearly the number of bands you have to deal with before. So one, under utilization charges, and two, have things improved utilization-wise in BAW, or do you anticipate they'll improve this year?
Speaker #5: And is that mostly GaAs at this stage? Because I know you're going to be shipping more, Bob, because I know you guys call it the high band.
Speaker #5: Historically, it's been called the mid-high band. It uses a lot of Bob. Does it use a lot of Bob? I mean, you're going into it for product here, so maybe it doesn't, actually.
Speaker #5: Maybe you don't have nearly the number of bands you had to deal with before. So, one, I know utilization charges, and two, have things improved utilization-wise in Bob, or do you anticipate they'll improve this?
Speaker #5: year? Thanks,
[Analyst] (JPMorgan): Thanks, Ed. Utilization is obviously not where we'd like it to be, so we still have ample headroom to support some of these strategic areas that we're going after at our largest customer and elsewhere. But there are no specific under utilization charges or period charges in the quarter. And the ops team on our side has done a terrific job of managing costs as we've been shutting down factories, or we've been moving them from North Carolina to Texas, and all of the other activities they have going on that we've discussed. It's a considerable effort. And at the same time, pulling out enough costs in order to support the gross margin improvements that we've been showing is a significant effort.
Peter Peng: Thanks, Ed. Utilization is obviously not where we'd like it to be, so we still have ample headroom to support some of these strategic areas that we're going after at our largest customer and elsewhere. But there are no specific under utilization charges or period charges in the quarter. And the ops team on our side has done a terrific job of managing costs as we've been shutting down factories, or we've been moving them from North Carolina to Texas, and all of the other activities they have going on that we've discussed. It's a considerable effort. And at the same time, pulling out enough costs in order to support the gross margin improvements that we've been showing is a significant effort.
Speaker #6: Ed. Utilization is obviously not where we'd like it to be, so we still have ample headroom to support some of these strategic areas that we're going after at our largest customer and elsewhere.
Speaker #6: But there are no specific underutilization charges or period charges in the quarter. And the ops team, on our side, has done a terrific job of managing costs as we've been shutting down factories, or we've been moving them from North Carolina to Texas, and all of the other activities they have going on that we've discussed.
Speaker #6: It's a considerable effort. And, at the same time, pulling out enough costs in order to support the gross margin improvements that we've been showing is a significant effort.
Speaker #5: Okay. Thanks.
David Fullwood: Okay. Thanks. Thanks, Ed.
David Fullwood: Okay. Thanks. Thanks, Ed.
Speaker #4: Thanks,
Speaker #3: This concludes our Q&A session. I would like to turn the conference back over to management for any closing remarks.
Operator: This concludes our question and answer session. I would like to turn the conference back over to management for any closing remarks.
Operator: This concludes our question and answer session. I would like to turn the conference back over to management for any closing remarks.
Speaker #4: I want to thank everyone for joining us today. I hope everyone has a great evening. Thank you.
David Fullwood: I want to thank everyone for joining us today. I hope everyone has a great evening. Thank you.
David Fullwood: I want to thank everyone for joining us today. I hope everyone has a great evening. Thank you.
Speaker #4: The conference is now concluded.
Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
