Q1 2026 Skyworks Solutions Inc Earnings Call

February 3, 2026

At this time, I will turn the call over to Roger Gil, vice president of investor relations for skyworks Mr. Gil, please go ahead.

Rajvindra Gill: At this time, I will turn the call over to Rajvindra Gill, Vice President of Investment Relations for Skyworks. Mr. Gill, please go ahead.

Operator: At this time, I will turn the call over to Rajvindra Gill, Vice President of Investor Relations for Skyworks. Mr. Gill, please go ahead.

Thank you, operator. Good afternoon, everyone and welcome to skyworks, First fiscal quarter 2026 conference call.

Rajvindra Gill: Thank you, Operator. Good afternoon, everyone, and welcome to Skyworks' first fiscal quarter 2026 conference call. With me today for our prepared remarks is Phil Brace, our Chief Executive Officer and President, and Philip Carter, Senior Vice President and Chief Financial Officer for Skyworks. This call is being broadcast over the web and can be accessed from the Investor Relations section of the company's website at skyworksinc.com. In addition, the company's prepared remarks will be made available on our website promptly after their conclusion during the call. Before we begin, I would like to remind everyone that our discussion will include statements relating to future results and expectations that are or may be considered forward-looking statements.

With me today for our prepared remarks, it's Phil brace, our chief executive officer and president and Philip Carter senior vice president and Chief Financial Officer for skyworks.

This call is being broadcast over the web and can be accessed from the investor relations section of the company's website at skyworks inc.com.

In addition, the companies prepared remarks will be made available on our website promptly after their conclusion during the call.

Before we begin, I would like to remind everyone that our discussion will include statements relating to Future results and expectations that are or may be considered for looking statements.

Q1 2026 Skyworks Solutions Inc Earnings Call

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Q1 2026 Skyworks Solutions Inc Earnings Call

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Tuesday, February 3rd, 2026 at 9:30 PM

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Philip Brace: Thanks, Rajvindra, and welcome, everyone. Before turning into the quarter, I want to briefly address our previously announced combination with Qorvo. We believe this transaction is highly strategic and transformative, bringing greater scale, deeper R&D, and a broader technology portfolio. Together, this combination is expected to reduce historical mobile volatility, strengthen our competitive position, enhance our broad market capabilities, and expand our TAM into defense and aerospace while creating a clear path to more than $500 million of synergies over time. As highlighted in our investor presentation on 28 October, we believe this combination will deliver substantial financial benefits. We expect to achieve healthy gross margins through the cycles in the 50% to 55% range, supported by significant operating leverage and enhanced earnings power. The combined company will generate robust free cash flow, underpinned by an extremely favorable capital structure with expected net leverage of approximately 1 at close.

Phil Brace: Thanks, Rajvindra, and welcome, everyone. Before turning into the quarter, I want to briefly address our previously announced combination with Qorvo. We believe this transaction is highly strategic and transformative, bringing greater scale, deeper R&D, and a broader technology portfolio. Together, this combination is expected to reduce historical mobile volatility, strengthen our competitive position, enhance our broad market capabilities, and expand our TAM into defense and aerospace while creating a clear path to more than $500 million of synergies over time. As highlighted in our investor presentation on 28 October, we believe this combination will deliver substantial financial benefits. We expect to achieve healthy gross margins through the cycles in the 50% to 55% range, supported by significant operating leverage and enhanced earnings power. The combined company will generate robust free cash flow, underpinned by an extremely favorable capital structure with expected net leverage of approximately 1 at close.

Philip Brace: These advantages position us to drive long-term value for our shareholders and customers and support continued investment in innovation and growth. Since announcing the transaction on 28 October, we've made solid progress. We've completed our initial regulatory filings, a shareholder vote has been scheduled, and our teams have begun integration planning. As is typical for a transaction of this scale, we expect a comprehensive regulatory review, and we are working closely with regulators around the world. We still expect the transaction to close in early calendar year 2027, subject to the receipt of required regulatory approvals, approval of both company shareholders, and the satisfaction of other customary closing conditions. I'd also like to recognize the Qorvo team for the constructive and collaborative approach they brought to the integration planning process. We're off to a great start and excited about the opportunity ahead when we come together as one stronger organization.

Phil Brace: These advantages position us to drive long-term value for our shareholders and customers and support continued investment in innovation and growth. Since announcing the transaction on 28 October, we've made solid progress. We've completed our initial regulatory filings, a shareholder vote has been scheduled, and our teams have begun integration planning. As is typical for a transaction of this scale, we expect a comprehensive regulatory review, and we are working closely with regulators around the world. We still expect the transaction to close in early calendar year 2027, subject to the receipt of required regulatory approvals, approval of both company shareholders, and the satisfaction of other customary closing conditions. I'd also like to recognize the Qorvo team for the constructive and collaborative approach they brought to the integration planning process. We're off to a great start and excited about the opportunity ahead when we come together as one stronger organization.

Philip Brace: I want to emphasize that we are committed to closing the transaction and believe in the long-term value creation opportunity that the deal unlocks for our customers and shareholders. Beyond these prepared remarks, we will not be discussing the transaction, as today's call will focus on our results from the first fiscal quarter as well as our outlook for the March quarter. Turning now to Skyworks' performance for this quarter. We stayed focused on what we can control: operational execution, customer engagement, and disciplined investment in our product roadmap. Our strategy remains straightforward: focus on our customers, invest in our core technologies, and continue to grow broad markets. Broad markets remain a key growth engine for the company, growing faster than the corporate average.

Phil Brace: I want to emphasize that we are committed to closing the transaction and believe in the long-term value creation opportunity that the deal unlocks for our customers and shareholders. Beyond these prepared remarks, we will not be discussing the transaction, as today's call will focus on our results from the first fiscal quarter as well as our outlook for the March quarter. Turning now to Skyworks' performance for this quarter. We stayed focused on what we can control: operational execution, customer engagement, and disciplined investment in our product roadmap. Our strategy remains straightforward: focus on our customers, invest in our core technologies, and continue to grow broad markets. Broad markets remain a key growth engine for the company, growing faster than the corporate average.

Philip Brace: Our products are designed into high-growth areas across a wide range of end markets, including connected vehicles, enterprise infrastructure, satellite communications, data center networking, and emerging Edge AI applications. This breadth supports durability and reduces reliance on any single program. Skyworks delivered strong results, exceeding the high end of our guidance, driven by upside in both mobile and broad markets. We posted revenue of $1.04 billion, delivered earnings per share of $1.54, generated $339 million of free cash flow, and paid $106 million in quarterly dividends. Revenue, gross margin, and non-GAAP EPS all came in above the midpoint of our outlook. In mobile, we outperformed expectations, supported by healthy sell-through and strong execution on new product launches at our top customer. Smartphone replacement cycles, while still lengthy, are beginning to shorten.

Phil Brace: Our products are designed into high-growth areas across a wide range of end markets, including connected vehicles, enterprise infrastructure, satellite communications, data center networking, and emerging Edge AI applications. This breadth supports durability and reduces reliance on any single program. Skyworks delivered strong results, exceeding the high end of our guidance, driven by upside in both mobile and broad markets. We posted revenue of $1.04 billion, delivered earnings per share of $1.54, generated $339 million of free cash flow, and paid $106 million in quarterly dividends. Revenue, gross margin, and non-GAAP EPS all came in above the midpoint of our outlook. In mobile, we outperformed expectations, supported by healthy sell-through and strong execution on new product launches at our top customer. Smartphone replacement cycles, while still lengthy, are beginning to shorten.

Philip Brace: This trend is driving increased unit growth as consumers upgrade more frequently, especially with the rise of new AI-capable devices and more integrated features. While we are mindful of broader industry discussions around component pricing and availability, we have not seen an impact on demand to date. Reminder that the vast majority of our mobile revenue is tied to flagship and premium-tier devices. Channel inventory remains lean, and we continue to closely monitor customer forecasts. As we look ahead to future business at our top customer, we successfully defended key mobile sockets and gained content where architecture changes created opportunities, with mixed dynamics potentially moderating some of that progress. Based on what we see today, we currently expect blended mobile content to be roughly flat year over year. We will not be commenting on specific sockets, models, or launch timing.

Phil Brace: This trend is driving increased unit growth as consumers upgrade more frequently, especially with the rise of new AI-capable devices and more integrated features. While we are mindful of broader industry discussions around component pricing and availability, we have not seen an impact on demand to date. Reminder that the vast majority of our mobile revenue is tied to flagship and premium-tier devices. Channel inventory remains lean, and we continue to closely monitor customer forecasts. As we look ahead to future business at our top customer, we successfully defended key mobile sockets and gained content where architecture changes created opportunities, with mixed dynamics potentially moderating some of that progress. Based on what we see today, we currently expect blended mobile content to be roughly flat year over year. We will not be commenting on specific sockets, models, or launch timing.

Philip Brace: We remain bullish on the long-term drivers of RF content, supported by accelerated replacement cycles coupled with rising RF complexity tied to AI-driven workloads and higher performance requirements. Broad markets delivered its eighth consecutive quarter of growth, with revenue up double digits year-over-year, reflecting strength across edge, IoT, data center, and automotive. In edge IoT, Wi-Fi 7 momentum continues to build, supported by bandwidth-intensive applications in the home and workplace. Wi-Fi 7's higher throughput, lower latency, and reliability position it as an important enabler as AI inference moves closer to the edge. Design win activity remains strong, backlog is healthy, and we're already engaged with customers on early Wi-Fi 8 programs, positioning us well for the next cycle. Automotive demand remains solid, driven by increased connectivity across telematics, infotainment, and software-defined vehicle architectures.

Phil Brace: We remain bullish on the long-term drivers of RF content, supported by accelerated replacement cycles coupled with rising RF complexity tied to AI-driven workloads and higher performance requirements. Broad markets delivered its eighth consecutive quarter of growth, with revenue up double digits year-over-year, reflecting strength across edge, IoT, data center, and automotive. In edge IoT, Wi-Fi 7 momentum continues to build, supported by bandwidth-intensive applications in the home and workplace. Wi-Fi 7's higher throughput, lower latency, and reliability position it as an important enabler as AI inference moves closer to the edge. Design win activity remains strong, backlog is healthy, and we're already engaged with customers on early Wi-Fi 8 programs, positioning us well for the next cycle. Automotive demand remains solid, driven by increased connectivity across telematics, infotainment, and software-defined vehicle architectures.

Philip Brace: Our pipeline is broad, global, and aligned with long-cycle platforms across multiple OEMs and tiers, giving us good visibility into fiscal 2026. In data center infrastructure, demand signals are improving across our customer base, supported by increasing design win activity. Timing and power management content is expanding as the ecosystem transitions to next-generation 800 gig and emerging 1.6 terabit architectures. We are seeing higher activity, particularly with cloud and networking customers that require tightening timing accuracy, improved power performance, and better synchronization across high-bandwidth systems. Broad Markets continues to expand its reach across a more diversified set of customers while consistently delivering margins above the corporate average. The demand drivers across these end markets are long-cycle and multi-year, positioning the business well as we move into fiscal 2026 and beyond.

Phil Brace: Our pipeline is broad, global, and aligned with long-cycle platforms across multiple OEMs and tiers, giving us good visibility into fiscal 2026. In data center infrastructure, demand signals are improving across our customer base, supported by increasing design win activity. Timing and power management content is expanding as the ecosystem transitions to next-generation 800 gig and emerging 1.6 terabit architectures. We are seeing higher activity, particularly with cloud and networking customers that require tightening timing accuracy, improved power performance, and better synchronization across high-bandwidth systems. Broad Markets continues to expand its reach across a more diversified set of customers while consistently delivering margins above the corporate average. The demand drivers across these end markets are long-cycle and multi-year, positioning the business well as we move into fiscal 2026 and beyond.

Philip Brace: With that, let me turn the call over to Philip for a discussion of last quarter's performance and outlook for Q2 of fiscal 2026. Thanks, Phil. Skyworks delivered revenue of $1.035 billion, exceeding the high end of our guidance range. During the quarter, our largest customer accounted for approximately 67% of revenue, consistent with the prior quarter. Mobile represented 62% of total revenue and came in higher than our expectations, driven by healthy sell-through at our top customer. Broad markets also outperformed expectations, growing 4% sequentially and 11% year-over-year, driven by growth across edge IoT, data center and cloud infrastructure, and automotive. Gross profit was $482 million, with gross margin of 46.6%. Operating expenses were $230 million at the low end of our guidance range, reflecting disciplined cost control while continuing to invest in priority growth areas.

Phil Brace: With that, let me turn the call over to Philip for a discussion of last quarter's performance and outlook for Q2 of fiscal 2026. Thanks, Phil. Skyworks delivered revenue of $1.035 billion, exceeding the high end of our guidance range. During the quarter, our largest customer accounted for approximately 67% of revenue, consistent with the prior quarter. Mobile represented 62% of total revenue and came in higher than our expectations, driven by healthy sell-through at our top customer. Broad markets also outperformed expectations, growing 4% sequentially and 11% year-over-year, driven by growth across edge IoT, data center and cloud infrastructure, and automotive. Gross profit was $482 million, with gross margin of 46.6%. Operating expenses were $230 million at the low end of our guidance range, reflecting disciplined cost control while continuing to invest in priority growth areas.

Philip Brace: Operating income was $252 million, translating to an operating margin of 24.3%. Other income was $6 million, and our effective tax rate was 10%, resulting in net income of $232 million and diluted earnings per share of $1.54, $0.14 above the midpoint of our guidance. We generated $396 million of operating cash flow and capital expenditures of $57 million, resulting in free cash flow of $339 million, or 33% free cash flow margin. We ended the quarter with approximately $1.6 billion in cash investments and $1 billion in debt, maintaining a strong balance sheet and ample flexibility to support our strategic and financial priorities. Looking ahead to Q2 of fiscal 2026, we expect revenue to range between $875 million to $925 million. We anticipate mobile to decline approximately 20% sequentially, consistent with seasonality.

Phil Brace: Operating income was $252 million, translating to an operating margin of 24.3%. Other income was $6 million, and our effective tax rate was 10%, resulting in net income of $232 million and diluted earnings per share of $1.54, $0.14 above the midpoint of our guidance. We generated $396 million of operating cash flow and capital expenditures of $57 million, resulting in free cash flow of $339 million, or 33% free cash flow margin. We ended the quarter with approximately $1.6 billion in cash investments and $1 billion in debt, maintaining a strong balance sheet and ample flexibility to support our strategic and financial priorities. Looking ahead to Q2 of fiscal 2026, we expect revenue to range between $875 million to $925 million. We anticipate mobile to decline approximately 20% sequentially, consistent with seasonality.

Philip Brace: Thanks, Phil. Skyworks delivered revenue of $1.035 billion, exceeding the high end of our guidance range. During the quarter, our largest customer accounted for approximately 67% of revenue, consistent with the prior quarter. Mobile represented 62% of total revenue and came in higher than our expectations, driven by healthy sell-through at our top customer. Broad markets also outperformed expectations, growing 4% sequentially and 11% year-over-year, driven by growth across Edge IoT, data center and cloud infrastructure, and automotive. Gross profit was $482 million, with a gross margin of 46.6%. Operating expenses were $230 million at the low end of our guidance range, reflecting disciplined cost control while continuing to invest in priority growth areas. Operating income was $252 million, translating to an operating margin of 24.3%.

Philip Brace: Other income was $6 million, and our effective tax rate was 10%, resulting in net income of $232 million and diluted earnings per share of $1.54, 14 cents above the midpoint of our guidance. We generated $396 million of operating cash flow and capital expenditures of $57 million, resulting in free cash flow of $339 million, or 33% free cash flow margin. We ended the quarter with approximately $1.6 billion in cash investments and $1 billion in debt, maintaining a strong balance sheet and ample flexibility to support our strategic and financial priorities. Looking ahead to the second quarter of fiscal 2026, we expect revenue to range between $875 million to $925 million. We anticipate mobile to decline approximately 20% sequentially, consistent with seasonality. We expect broad markets to be flat sequentially, representing 44% of sales and up high single digits year over year.

Philip Brace: Yeah, what I'm really excited about, thanks for the question. Look, what's always impressed me is the complementary nature of our portfolios. In fact, it's pretty clear Qorvo does a lot of the antenna side of the house, which we don't really have at all. So I'm really excited about bringing those complementary technologies together. Particularly in the RF side, it should result in reduced volatility. It should increase our scale on the RF side, giving us the opportunity to innovate across the RF chain. Brings us lots of engineers that we think are highly valuable. And I just think the future is super bright in how we do that. And then we bring the combination together, it brings a fantastic broad market business as well. So super bullish about that, and I hope that answered your question.

Phil Brace: Yeah, what I'm really excited about, thanks for the question. Look, what's always impressed me is the complementary nature of our portfolios. In fact, it's pretty clear Qorvo does a lot of the antenna side of the house, which we don't really have at all. So I'm really excited about bringing those complementary technologies together. Particularly in the RF side, it should result in reduced volatility. It should increase our scale on the RF side, giving us the opportunity to innovate across the RF chain. Brings us lots of engineers that we think are highly valuable. And I just think the future is super bright in how we do that. And then we bring the combination together, it brings a fantastic broad market business as well. So super bullish about that, and I hope that answered your question.

Philip Brace: Yeah, what I'm really excited about, thanks for the question. Look, what's always impressed me is the complementary nature of our portfolios. In fact, it's pretty clear, I mean, Qorvo does a lot of the antenna side of the house, which we don't really have at all. So I'm really excited about bringing those complementary technologies together. Particularly on the RF side, it should result in reduced volatility. It should increase our scale on the RF side, giving us the opportunity to innovate across the RF chain. It brings us lots of engineers that we think are highly valuable. And I just think the future is super bright in how we do that. And then we bring the combination together; it brings a fantastic broad market sense as well. So super bullish about that, and I hope that answered your question.

Philip Brace: Yeah, look, I think that we bring a tremendous scale all the way from a lot of the antenna areas all the way back to the pads and a number of different critical RF technologies. And when we see the RF complexity evolving as AI workloads look more to the edge, there's more transmit capability and things coming down the pipe, from what we can see, having the broadest RF portfolio in the industry is going to be a really powerful opportunity for us. And then also, I think, keep in mind, it gives us an opportunity to innovate in a variety of other areas too. We talked about Wi-Fi or some of the other areas as well. The world is connected wirelessly. There are billions of devices connected wirelessly. And I think it continues to give us a platform to invest in that for the future going forward.

Phil Brace: Yeah, look, I think that we bring a tremendous scale all the way from a lot of the antenna areas all the way back to the pads and a number of different critical RF technologies. And when we see the RF complexity evolving as AI workloads look more to the edge, there's more transmit capability and things coming down the pipe, from what we can see, having the broadest RF portfolio in the industry is going to be a really powerful opportunity for us. And then also, I think, keep in mind, it gives us an opportunity to innovate in a variety of other areas too. We talked about Wi-Fi or some of the other areas as well. The world is connected wirelessly. There are billions of devices connected wirelessly. And I think it continues to give us a platform to invest in that for the future going forward.

Yeah, you know what? I'm really excited about. Thanks for the question. You know, look, it's always impressed. Me is the nature complimentary nature of our portfolios. In fact, you know, it's pretty clear, I mean corvo does a lot of the antenna side of the house which we don't really have at all. So I'm really excited about bringing those complimentary Technologies together. You know, particularly in the RF side, it should result in reduced volatility, it should increase our scale on the RF side, giving us the opportunity to innovate across the RF chain brings us. Lots of Engineers that we think are highly valuable. Uh, and I just think there's just the future is super bright and how we do that. And and then we bring the, you know, the combination together. It brings a fantastic, you know, broad Market synthesis as well. So, you know, super, super bullish about that and I hope that answers your question.

Yeah you know look I think that we we bring a tremendous scale all the way from a lot of the antenna areas all the way back to the pads and a number of different critical RF Technologies. And when we see the RF complexity involving as AI workloads, look more to the edge. There's more transmit capability and things coming down the pipe. From what we can see. Having the broadest RF portfolio in the industry is going to be uh really powerful uh you know, opportunity for us. And then also I think keep in mind, it gives us an opportunity to innovate in a variety of other areas too that we talk about Wi-Fi or some of the other areas as well. The world is connected. Wirelessly, there are billions of devices connected wirelessly and I think it continues to give us a platform to invest in that uh for for the future going forward.

Philip Brace: Yeah, look, I think that we bring a tremendous scale all the way from a lot of the antenna areas all the way back to the pads and a number of different critical RF technologies. And when we see the RF complexity evolving as AI workloads look more to the edge, there's more transmit capability and things coming down the pipe, from what we can see, having the broadest RF portfolio in the industry is going to be a really powerful opportunity for us. And then also, I think, keep in mind, it gives us an opportunity to innovate in a variety of other areas, too. We talked about Wi-Fi or some of the other areas as well. The world is connected wirelessly. There are billions of devices connected wirelessly. And I think it continues to give us a platform to invest in that for the future going forward.

Philip Brace: Yeah, thanks. I mean, look, this marks our eighth consecutive quarter of sequential growth with double-digit year-over-year revenue expansion. So we feel really good about that. When I look at kind of underneath the covers, what you asked for, I guess I would point to three major areas, right? The first would be Wi-Fi, right? Wi-Fi 7 adoption continues to be very strong, and there are some reasons for that, right? The increased bandwidth, the increased security. As AI moves, continues to move out there to the edge, we see Wi-Fi continuing to be a major platform for that. And the demand there remains robust. And certainly, we see a long push of innovation that leads out to Wi-Fi 8 and beyond. So I'm particularly excited about that one. In the automotive stuff, for us, that's also been an area that we've seen good growth.

Phil Brace: Yeah, thanks. I mean, look, this marks our eighth consecutive quarter of sequential growth with double-digit year-over-year revenue expansion. So we feel really good about that. When I look at kind of underneath the covers, what you asked for, I guess I would point to three major areas, right? The first would be Wi-Fi, right? Wi-Fi 7 adoption continues to be very strong, and there are some reasons for that, right? The increased bandwidth, the increased security. As AI moves, continues to move out there to the edge, we see Wi-Fi continuing to be a major platform for that. And the demand there remains robust. And certainly, we see a long push of innovation that leads out to Wi-Fi 8 and beyond. So I'm particularly excited about that one. In the automotive stuff, for us, that's also been an area that we've seen good growth.

Philip Brace: And there's a lot of headlines in the news about auto markets, but we actually tend to be kind of in the sweet spot of the growth area because we're talking about vehicle-to-vehicle connectivity. We're talking about infotainment and power isolation products, which are really kind of independent of what kind of combustion engine you use. And we've seen pretty broad-based wins across the board globally on that. So that seems to be some tailwind for us. And then finally, on the power and timing, which is really related to the data center side, I mean, we're seeing tremendous uptick in our activity design wins, particularly as we have a really strong lead in what we call jitter-attenuating clocks, which are really important as the frequencies continue to go up to 800 gig and 1.6 terabit.

Phil Brace: And there's a lot of headlines in the news about auto markets, but we actually tend to be kind of in the sweet spot of the growth area because we're talking about vehicle-to-vehicle connectivity. We're talking about infotainment and power isolation products, which are really kind of independent of what kind of combustion engine you use. And we've seen pretty broad-based wins across the board globally on that. So that seems to be some tailwind for us. And then finally, on the power and timing, which is really related to the data center side, I mean, we're seeing tremendous uptick in our activity design wins, particularly as we have a really strong lead in what we call jitter-attenuating clocks, which are really important as the frequencies continue to go up to 800 gig and 1.6 terabit.

I mean, look, you're at this park. So, it's consecutive quarter of sequential growth, uh, with double digit year-over-year, Revenue expansion. So we feel really good about that. You know, when I look at kind of underneath the covers, what you asked for, I would, I guess I would point to 3 major areas, right? The first would would be Wi-Fi, right Wi-Fi, 7 ADT and continues to be very strong and and there's some reasons for that, right? The increased bandwidth, The increased security as really as AI, moves continues to move out there, to the edge, we see Wi-Fi, continuing to be a major platform for that. And, you know, the man there remains remains robust and certainly we see a long, you know, push of innovation that that leads out to Wi-Fi, 8 and Beyond. So I'm particularly excited about that 1, you know, in the automotive stuff for us that's also been an area that we we've seen good growth. And, you know, there's a lot of, you know, headlines in the news about Auto markets. But we actually tend to be kind of in The Sweet Spot of the growth area, because we're talking about vehicle-to-vehicle connectivity. We're talking about infotainment and power, isolation products, which are really kind of independent, of of the, what kind of combustion engine you?

Philip Brace: Yeah, thanks. I mean, look, this marks our eighth consecutive quarter of sequential growth with double-digit year-over-year revenue expansion. So we feel really good about that. When I look at kind of underneath the covers, what you asked for, I guess I would point to three major areas, right? The first would be Wi-Fi, right? Wi-Fi 7 adoption continues to be very strong. And there are some reasons for that, right? The increased bandwidth, the increased security. As AI moves, continues to move out there to the edge, we see Wi-Fi continuing to be a major platform for that. And the demand there remains robust. And certainly, we see a long push of innovation that leads out to Wi-Fi 8 and beyond. So I'm particularly excited about that one. On the automotive stuff, for us, that's also been an area that we've seen good growth.

Philip Brace: There's a lot of headlines in the news about auto markets. But we actually tend to be kind of in the sweet spot of the growth area because we're talking about vehicle-to-vehicle connectivity. We're talking about infotainment and power isolation products, which are really kind of independent of what kind of combustion engine you use. And we've seen pretty broad-based wins across the board globally on that. So that seems to be some tailwind for us. And then finally, on the power and timing, which is really related to the data center side, I mean, we're seeing tremendous uptick in our activity design wins, particularly as we have a really strong lead in what we call jitter-attenuating clocks, which are really important as the frequencies continue to go up to 800 gig and 1.6 terabytes.

Yeah, thanks. I mean, look, you're at this park. So, it's consecutive quarter of sequential growth, uh, with double digit year-over-year, Revenue expansion. So we feel really good about that. You know, when I look at kind of underneath the covers, what you asked for, I would, I guess I would point to 3 major areas, right? The first would would be Wi-Fi, right Wi-Fi, 7 ADT and continues to be very strong and and there's some reasons for that, right? The increased bandwidth, The increased security as really as AI, moves continues to move out there, to the edge, we see Wi-Fi, continuing to be a major platform for that. And, you know, the demand there remains remains robust and certainly we see a long, you know, push of innovation that that leads out to Wi-Fi, 8 and Beyond. So I'm a particularly excited about that. 1, you know, in the automotive stuff for us that's also been an area that that we've seen good growth. And, you know, there's a lot of, you know, headlines in the news about Auto markets. But we actually tend to be

Philip Brace: Yeah, thanks. Good question. Look, I think what I would say, we compete for business every single year at our large customer. I don't expect that to change. I'm pleased we defended our major sockets at all the mobile platforms. So I'm pleased we did that. I'm not satisfied that we did because I think we have the opportunity to do even better than that. But I'm pleased we defended the sockets. And I think some of our prepared remarks from our largest customer suggest there's strong tailwind with both upgrade cycles, AI demand pushing things to the edge. And we continue to see very strong demand signals, not just on the mobile side, but pretty much broad-based right now as well. We're keeping a close eye on it, just given some of the commentary around component prices and things.

Phil Brace: Yeah, thanks. Good question. Look, I think what I would say, we compete for business every single year at our large customer. I don't expect that to change. I'm pleased we defended our major sockets at all the mobile platforms. So I'm pleased we did that. I'm not satisfied that we did because I think we have the opportunity to do even better than that. But I'm pleased we defended the sockets. And I think some of our prepared remarks from our largest customer suggest there's strong tailwind with both upgrade cycles, AI demand pushing things to the edge. And we continue to see very strong demand signals, not just on the mobile side, but pretty much broad-based right now as well. We're keeping a close eye on it, just given some of the commentary around component prices and things.

Kind of in The Sweet Spot of the growth area, because we're talking about vehicle-to-vehicle connectivity, we're talking about infotainment and power isolation products, which are really kind of independent of of the, what kind of combustion engine you use? Uh, and we've seen pretty broad-based, winds across the board globally on that so that seems to be until 1 for us and then finally, you know, on the power and timing which is really related to the data center side. I mean, we're seeing tremendous uh, uptick in our activity design wins. Uh, particularly as you know, we have a really strong lead in what we call J Jitter attenuating clocks which are really important as the frequencies continue to go up to 800 gig or 1.6 terabytes. And then some of our power isolation products which really have to do with as the servers move to higher and higher voltage. You need to isolate the power that's coming in from the low voltage power of the actual silicon devices. So, I mean, I would characterize Wi-Fi automotive and then data center with power and timing is kind of being 3. Structural Tailwind things, we have in our broad markets, we're excited about

Philip Brace: Yeah, thanks. Good question. Look, I think what I would say, we compete for business every single year at our large customer. I don't expect that to change. I'm pleased we defended our major sockets at all the mobile platforms. So I'm pleased we did that. I'm not satisfied that we did because I think we have the opportunity to do even better than that. But I'm pleased we defended the sockets. And I think some of our prepared remarks from our largest customer suggest there's a strong tailwind with both upgrade cycles, AI demand pushing things to the edge. And we continue to see very strong demand signals, not just on the mobile side, but pretty much broad-based right now as well. We're keeping a close eye on it, just given some of the commentary around component prices and things.

Philip Brace: I think, Ed, thanks for the question. I think that we got to be careful. It's difficult for us to really comment on specific models and launch timings and things like that. But I think that it's nice to say some of the content varies between particular models, and it's really hard for us to predict what ones are going to sell, when they're going to launch, and how they're going to do. So I think our best guess right now is our blended content should be flat. We defended our key sockets. We gained back some more architecture changes. We think net overall could be flat. We do expect some tailwind with respect to some of the demand we're seeing, right? I mean, it's very strong demand across the board. I'm happy that we did that. I'm not satisfied that we did.

Phil Brace: I think, Ed, thanks for the question. I think that we got to be careful. It's difficult for us to really comment on specific models and launch timings and things like that. But I think that it's nice to say some of the content varies between particular models, and it's really hard for us to predict what ones are going to sell, when they're going to launch, and how they're going to do. So I think our best guess right now is our blended content should be flat. We defended our key sockets. We gained back some more architecture changes. We think net overall could be flat. We do expect some tailwind with respect to some of the demand we're seeing, right? I mean, it's very strong demand across the board. I'm happy that we did that. I'm not satisfied that we did.

Philip Brace: I think, Ed, thanks for the question. I think that we got to be careful. It's difficult for us to really comment on specific models, launch timings, and things like that. But I think that it's nice to say some of the content varies between particular models. And it's really hard for us to predict what ones are going to sell, when they're going to launch, and how they're going to do. So I think our best guess right now is our blended content should be flat. We defended our key sockets. We gained back some of our architecture changes. And we think net overall could be flat. We do expect some tailwind with respect to some of the demand we're seeing, right? I mean, it's very strong demand across the board. I'm happy that we did that. I'm not satisfied that we did.

Philip Brace: Yeah, look, I think right now, it really depends on the technology base. We're not going to talk about specific loading of specific factories. I would say that in general, in the products that are being utilized, we are definitely at capacity, right? We are definitely hand-to-mouth from that. We're scrambling to meet RF demands. And right now, our demand exceeds our supply. And so we're continuing to work that. There are pockets of areas where we talked about, for example, a specific facility. And that really has to do with more technology changes than anything like that. So I think that our gross margin guide, if you're kind of going there, that really reflects what we have best knowledge today of balancing mix, right, costs, prices, and things where we want to go, right?

Phil Brace: Yeah, look, I think right now, it really depends on the technology base. We're not going to talk about specific loading of specific factories. I would say that in general, in the products that are being utilized, we are definitely at capacity, right? We are definitely hand-to-mouth from that. We're scrambling to meet RF demands. And right now, our demand exceeds our supply. And so we're continuing to work that. There are pockets of areas where we talked about, for example, a specific facility. And that really has to do with more technology changes than anything like that. So I think that our gross margin guide, if you're kind of going there, that really reflects what we have best knowledge today of balancing mix, right, costs, prices, and things where we want to go, right?

You know, I think, uh, Ed. Thanks for the question, you know? I think that, um, we got to be careful around—it's difficult for us to really comment on specific models and launch timings and things like that. But I think that, you know, suffice to say some of the content varies between particular models, and it's really hard for us to predict what ones are going to sell, when they're going to launch, and how they're going to do. So I think our best guess right now is, you know, our blended content should be flat. We defended our key sockets, we gained back some where architecture changes, and we think net overall could be flat. We do expect some tailwind with respect to some of the demand we're seeing, right? I mean, it's a very strong demand across the board. Um, I'm happy that we did that. I'm not satisfied that we did, uh, but I'm happy we—we did that. And we've got some more opportunities to help. So, hopefully, that—that we try our best to kind of answer that. That's kind of where we're projecting: a blended flat at this point.

Philip Brace: Yeah, look, I think right now, it really depends on the technology base. We're not going to talk about specific loading of specific factories. I would say that in general, in the products that are being utilized, we are definitely at capacity, right? We are definitely hand-to-mouth from that. We're scrambling to meet great demands. And right now, our demand exceeds our supply. And so we're continuing to work that. There are pockets of areas where we talked about, for example, a specific facility. And that really has to do with more technology changes than anything like that. So I think that our gross margin guide, if you're kind of going there, that really reflects what we have best knowledge today of balancing mix, right, costs, prices, and things where we want to go, right? It's something we keep a close eye on.

Yeah, look I think right now it really depends on the Technology based. We're not going to talk about specific loading, a specific factories. I, I would say that in general and the, and the products that are being utilized, we we are definitely, uh, we are at at capacity, right? We are definitely a hand-to-mouth from that. We are, we're scrambling to meet the reef demands, uh, and right now our demand exceeds our our supply and so we're continuing to work that there are pockets of areas where, you know, we talked about, for example, a specific facility and not really has to do with more technology changes uh than anything like that. So you know I think that our, our gross margin guide. If if you're kind of going there that really reflects what we what we have best knowledge today of of you know balancing mix right costs prices and things where we want to go, right? It's something. We keep a close eye on and and we're going to continue to work that going forward.

Philip Brace: Well, gee, overall, I think obviously, being our large customer, any sort of swings in demand are impactful for us in terms of how we manage that. Right now, we are very constrained across the board. We're fighting hand-to-mouth for products, and we continue to do that. I think we've done an effective job operationally managing that. I mean, having some peaks and valleys with respect to demands is not unusual for that customer as they ramp up and down through the cycles. And so right now, I think that we tend to be in a situation where the demand is just very strong. And we've seen these situations before, and we're doing our best to manage them. And should signals change, then we'll deal with that accordingly. I mean, I'm not sure I can give you a better answer than that.

Phil Brace: Well, gee, overall, I think obviously, being our large customer, any sort of swings in demand are impactful for us in terms of how we manage that. Right now, we are very constrained across the board. We're fighting hand-to-mouth for products, and we continue to do that. I think we've done an effective job operationally managing that. I mean, having some peaks and valleys with respect to demands is not unusual for that customer as they ramp up and down through the cycles. And so right now, I think that we tend to be in a situation where the demand is just very strong. And we've seen these situations before, and we're doing our best to manage them. And should signals change, then we'll deal with that accordingly. I mean, I'm not sure I can give you a better answer than that.

Well, gee, that you know, let me and look overall. I think the large customer, right? Any sort of swings in demand are are impactful for us. In terms of how we manage that you know, right now we are we are very constrained across the board we we're fighting hand them out for products and we continue to do that. I think we've been an effective. We've done an effective job operationally managing that? I mean, having some Peaks and valleys with respect to demands is not unusual for that customer as they ramp up and down through the cycles. And so, you know, right now, I think that we tend to be in a situation where the demand is just very strong. And we've seen these situations before we're doing our best to manage them and you should signals change. Then then we'll, we'll deal with that accordingly. I mean I I'm not sure I can give you a better answer than that.

Well, gee, that you know, let me and look overall, I think uh obviously being our large customer, right? Any sort of swings in demand are are impactful for us. In terms of how we manage that, you know, right now we are, uh, we are very constrained across the board. We we're fighting hand-to-mouth for products and we continue to do that. I think we've been an effective. We've done an effective job, operationally managing that? I mean, having some Peaks and valleys with respect to demands is not unusual for that customer as they ramp up and down through the cycles. And so, you know, right now I think that we tend to be in a situation where the demand is just very strong. And we've seen these situations before and we're doing our best to manage them, and it should signals change. Then then we'll, we'll deal with that accordingly. I mean I I'm not sure I can give you a better answer than that.

About it. I mean we talked about Wi-Fi being a big driver there. We talked about being in the auto segment growing faster, the data center uh spice with power and and our timing products continues to be a good 1, you know, longer term, you know. It's that's that's not yet big enough to talk about but I'm excited about we're doing a satellite coms, too. I mean, I I just think we've got, you know, exposure in a number of areas. I mean, I just I try and remind everybody to talk to you. The world is connected wirelessly. We're in a very good spot for that, and some of our products that play in the data center, including timing and power are also seeing a bit of Tailwind. So, you know, I think we've got a lot of great stuff going on in our broad markets continues to grow and continues to perform, uh, at a better and corporate average. I think that'll help it. That'll help us continue to out, get outside earnings out in the future.

Philip Brace: Yeah, I think I kind of mentioned them before. I mean, some of the areas that I'm excited about, I mean, we talked about Wi-Fi being a big driver there. We talked about being in the auto segment growing faster. The data center spike with power and our timing products continues to be a good one. Longer term, it's not yet big enough to talk about. But I'm excited about what we're doing in satellite comms, too. I mean, I just think we've got exposure in a number of areas. I mean, I try and remind everybody that I talked to, the world is connected wirelessly. We're in a very good spot for that. And some of our products that play in the data center, including timing and power, are also seeing a bit of tailwind. So I think we've got a lot of great stuff going on.

No, some of the areas uh that I'm I'm excited about. I mean we talked about Wi-Fi being a big driver there. We talked about being in the auto segment growing faster, the data center uh spikes with power and and our timing products continues to be a good 1 you know longer term. You know it doesn't that's not not yet big enough to talk about but I'm excited about what we're doing as satellite coms, too. I mean, I I just think we've got, you know, exposure in a number of areas. I mean, I just I try and remind everybody to talk to the world is connected. Wirelessly. We're in a very good spot for that, and some of our products that play in the data center, including timing and power are also seeing a bit of Tailwind. So, you know, I think we've got a lot of great stuff going on and our broad markets continues to grow and continues to perform, uh, at a better and corporate average. I think that'll help it. That'll help us continue to out, get outside earnings out in the future.

Philip Brace: Yeah. On the data center side, yes, the short answer is yes. That is growing faster than our overall broad markets. And let me give you an example of some of the power isolation products they have to put it in context. The power isolation products, what they do is they basically isolate the very high voltage from the actual lower voltage microcontrollers and GPUs and things. And so, as all the trends with respect to having higher and higher voltage on the data center side, you need to have very specialty products that basically isolate those powers because you can imagine if you put 400- or 800-volt DC onto a GPU, it's probably not going to last very long. And so all of those products, we're getting lots of demand in that space. And then the timing products, really around 1.

Phil Brace: Yeah. On the data center side, yes, the short answer is yes. That is growing faster than our overall broad markets. And let me give you an example of some of the power isolation products they have to put it in context. The power isolation products, what they do is they basically isolate the very high voltage from the actual lower voltage microcontrollers and GPUs and things. And so, as all the trends with respect to having higher and higher voltage on the data center side, you need to have very specialty products that basically isolate those powers because you can imagine if you put 400- or 800-volt DC onto a GPU, it's probably not going to last very long. And so all of those products, we're getting lots of demand in that space. And then the timing products, really around 1.

Philip Brace: about 800 gig and 1.6 terabit with their low jitter-attenuating clocks are doing really well as well. So right now, those are going definitely faster than the corporate average. The margins are better than the corporate average. We just wish they would be a lot bigger. So we're continuing to work that and invest in those. Those are continuing to be core investment areas for us. With respect to Wi-Fi, you asked about the combination, right? I think that both of the products have their unique positions to do that. We'll evaluate that going forward in terms of what we want to do. What we've told the customers is we're continuing to keep our commitments to them going forward time, and we're going to make the best decisions on how we do that going forward.

Phil Brace: about 800 gig and 1.6 terabit with their low jitter-attenuating clocks are doing really well as well. So right now, those are going definitely faster than the corporate average. The margins are better than the corporate average. We just wish they would be a lot bigger. So we're continuing to work that and invest in those. Those are continuing to be core investment areas for us. With respect to Wi-Fi, you asked about the combination, right? I think that both of the products have their unique positions to do that. We'll evaluate that going forward in terms of what we want to do. What we've told the customers is we're continuing to keep our commitments to them going forward time, and we're going to make the best decisions on how we do that going forward.

Um yeah on the on the data center side, you know, 1 of the yes the short answer is. Yes, that is growing faster than our overall, broad markets and let me give you an example of some of the power isolation products. They have to put in contacts, the power, escalation products, what they do is they provide they basically isolate the very high voltage, uh, from the actual lower voltage, microcontrollers, and ngps, and things. And so, as you all the trends with respect to having higher and higher voltage on the data center side, you need to have very Specialty Products that basically isolate those Powers because you can imagine if you put 4 or 800 volt DC onto a GPU, there's probably not going to last very long and so all of those products. So we're getting lots of demand in that space and then the timing products really around 1. Point about 800 gig and 1.6 terabyte with a little Jitter, Jitter attenuating clock. So are doing really well as well. So right now, right? Those are going definitely faster in the corporate average. The margins are better in the corporate average.

Philip Brace: Yeah, on the data center side, the short answer is yes. That is growing faster than our overall Broad markets. And let me give you an example of some of the power isolation products they have to put it in context. The power isolation products, what they do is they provide; they basically isolate the very high voltage from the actual lower voltage microcontrollers, GPUs, and things. And so all the trends with respect to having higher and higher voltage on the data center side, you need to have very specialty products that basically isolate those powers because you can imagine if you put 400- or 800-volt DC onto a GPU, it's probably not going to last very long. And so all of those products so we're getting lots of demand in that space. And then the timing products, really around 1.

Philip Brace: about 800 gig and 1.6 terabit with their low jitter-attenuating clocks are doing really well as well. So right now, those are going definitely faster than the corporate average. The margins are better than the corporate average. We just wish they're a lot bigger. And so we're continuing to work that and invest in those. Those are continuing to be core investment areas for us. With respect to Wi-Fi, you asked about the combination, right? I think that both of the products have their unique positions to do that. We'll evaluate that going forward in terms of what we want to do. What we've told the customers is we're continuing to keep our commitments to them going forward time. And we're going to make the best decisions on how we do that going forward.

Um yeah on the on the data center side, you know, 1 of the yes the short answer is. Yes, that is growing faster than our overall, broad markets and let me give you an example of some of the power isolation products. They have to put in contacts, the power, escalation products, what they do is they provide they basically isolate the very high voltage, uh, from the actual lower voltage, microcontrollers, and, and gpus, and things. And so, as you all the trends with respect to having higher and higher voltage on the data center side, you need to have very Specialty Products that basically isolate those Powers. Because you can imagine, if you put 4 or only 800 volts DC onto a GPU, there's probably not going to last very long and so all of those products. So we're getting lots of demand in that space and then the timing products really around 1. Point about 800 gig and 1.6 terabyte with a little Jitter, Jitter attenuating clock. So are doing really well as well. So right now,

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Q1 2026 Skyworks Solutions Inc Earnings Call

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