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DATE

Tuesday, May 5, 2026 at 4:30 p.m. ET

CALL PARTICIPANTS

  • President and Chief Executive Officer — Philip Gordon Brace
  • Senior Vice President and Chief Financial Officer — Philip Carter

TAKEAWAYS

  • Revenue -- $944 million, surpassing the high end of guidance by roughly $20 million, with contributions from both mobile and broad markets.
  • EPS -- Diluted earnings per share of $1.15, above the high end of the guidance range.
  • Dividends -- $107 million paid in quarterly dividends.
  • Gross Margin -- 45%, matching the midpoint of guidance; cost controls and selective price adjustments addressed input cost pressures.
  • Operating Income -- $189 million, resulting in a 20% operating margin.
  • Net Income -- $173 million after a 10% effective tax rate and $3 million in other income.
  • Mobile Revenue -- Accounted for 58% of total revenue, driven by healthy sell-through, new launches, and outperformance versus expectations.
  • Largest Customer Exposure -- The largest customer represented approximately 60% of total revenue.
  • Broad Markets Revenue -- Contributed 42% of sales; segment grew 10% year over year with strength in Wi-Fi, data center, and automotive.
  • Broad Markets Growth Engines -- Wi-Fi, data center, and automotive collectively grew 30% year over year and made up nearly two thirds of the broad markets segment.
  • Data Center Segment -- Expected to expand by nearly 50% for the year, reflecting structural shifts in demand.
  • China Exposure -- Total annual revenue from China is under $200 million, with handset revenue below $20 million.
  • Cash and Debt -- Quarter-end cash and investments totaled approximately $1.4 billion; debt stood at $1 billion.
  • Design Win -- Secured a multigenerational design win with a leading Android OEM, anticipated to generate over $1 billion in revenue through 2030.
  • Qorvo Transaction Update -- Regulatory reviews for the combination with Qorvo (NASDAQ:QRVO) are advancing as expected, including Phase II review with China's SAMR; anticipated closing remains early 2027, with "increasingly hopeful" potential for late 2026 closure.
  • Synergy Target -- Company reaffirmed expected synergies of $500 million or more from the Qorvo combination.
  • Outlook -- Next quarter revenue forecast of $900 million–$950 million; mobile anticipated to decline low single digits sequentially, while broad markets expected up modestly and projected to comprise 43% of sales with high single-digit year-over-year growth.
  • Gross Margin Guidance -- Projected 44.5%–45.5% for the next quarter, consistent with prior quarter and reflecting higher input costs.
  • Operating Expense Guidance -- Expenses projected between $235 million and $245 million for the next quarter as the company funds R&D while maintaining discretionary spend discipline.
  • EPS Guidance -- Expected diluted EPS of $1.03 at the midpoint of the revenue forecast for the next quarter.
  • Product Innovation -- Launched new BAW filters for early 6G FR3 spectrum and next-gen RF front-end solutions exceeding 7 GHz; expanded timing portfolio addressing data center, wireless, and PCIe Gen 7.
  • Wi-Fi 7 and 8 Positioning -- Cited accelerated Wi-Fi 7 adoption and early engagement with Wi-Fi 8 customers for the next upgrade cycle.

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RISKS

  • Gross margin headwinds persist due to increased input costs, with management stating, "Input costs remain a modest headwind to gross margin" and reference to ongoing expedite fees and elevated gold prices.
  • Mobile revenue expected to decline "approximately low single digits sequentially," with management referencing typical seasonality but not indicating offsetting factors in the coming quarter.

SUMMARY

Skyworks Solutions (SWKS +5.39%) highlighted a landmark multigenerational Android OEM design win set to deliver over $1 billion through 2030, furthering premium RF content penetration and growth. The Qorvo transaction regulatory process is moving forward as planned, with the company maintaining guidance for synergies of $500 million or more and noting potential for an accelerated closing. Product innovation continued at pace, targeting emerging technologies with BAW filters for 6G, advanced RF solutions, and expanded timing offerings for high-speed data infrastructure. Management projected stable gross margins and flat or improving broad markets momentum, while maintaining a disciplined approach to operating expenses to sustain R&D priorities.

  • Management emphasized, "We expect [the Android design win] to be rising year over year," positioning it as a tailwind for revenue growth through the decade.
  • The data center segment, while currently modest, was stated to be on track for "nearly 50%" annual growth, reflecting diversification beyond mobile.
  • Company noted it supported Qorvo's $400 million share repurchase in accordance with merger agreement covenants, highlighting capital allocation discipline amid the combination process.
  • Operating cash flow and balance sheet flexibility remain priorities, with approximately $1.4 billion in cash and $1 billion in debt at quarter end supporting strategic initiatives.

INDUSTRY GLOSSARY

  • BAW Filter: Bulk acoustic wave filter, a high-frequency RF component used to enable advanced wireless communications, especially in emerging 5G/6G standards.
  • RF Content: The collection of radio-frequency components (filters, amplifiers, switches, etc.) inside a wireless device, critical for enabling connectivity and supporting higher-bandwidth standards.
  • SAMR: State Administration for Market Regulation, the regulatory authority in China responsible for antitrust and merger reviews in high-tech sectors.
  • OEM: Original Equipment Manufacturer; in this context, refers to companies that produce branded consumer electronics devices.

Full Conference Call Transcript

Philip Gordon Brace: Thanks, Raji, and welcome, everyone. Let me begin by highlighting a few key developments. One, we secured a significant multigenerational design win with a leading Android OEM expected to generate over $1 billion in revenue through 2030. This win reflects our expanding footprint in premium AI-enabled devices, validating our RF content platform and our technology differentiation. Two, we introduced a range of new product innovations, including BAW filters targeting early 6G FR3 spectrum and next-generation RF front-end solutions supporting frequencies above 7 gigahertz. We also expanded our timing portfolio with new clock buffers addressing data center, wireless infrastructure, and PCIe Gen 7 applications.

Moreover, we are actively engaged with customers in early Wi-Fi 8 programs, positioning us well for the next upgrade cycle. Three, regarding the Qorvo combination. Regulatory reviews are progressing as expected. We have entered Phase II of the China SAMR review and are maintaining constructive dialogue with the relevant antitrust authorities. While our formal guidance remains an expected closing early in calendar 2027, we are increasingly hopeful that we could close in late 2026. We continue to make good progress in our integration planning and remain confident in our ability to realize the anticipated synergies of $500 million or more.

Finally, in accordance with our operating covenants in our merger agreement, we supported Qorvo's $400 million share repurchase during the quarter, reflecting what we believe to be a prudent and efficient deployment of capital. Our confidence in the strategic and financial logic of this combination remains as strong as ever, and we look forward to closing and delivering its full value to shareholders and customers. With that, and consistent with prior practice, we will not be discussing the transaction further on today's call and will focus on our second fiscal quarter results and June outlook. Skyworks Solutions, Inc. delivered strong results, driven by upsides in both mobile and broad markets.

We posted revenue of $944 million, roughly $20 million above the high end of our guidance range, delivered earnings per share of $1.15, [inaudible] above the high end of our guidance range, and paid $107 million in quarterly dividends. We continue to see solid demand across the portfolio, with strength spanning mobile, Wi-Fi, data center, and automotive. We are mindful of the ongoing industry discussion around memory supply and pricing. Consistent with what we observed last quarter, we have not seen an impact on our business to date. Demand across mobile and broad markets has remained solid, channel inventories are lean, and our portfolio is weighted toward premium, high-complexity solutions where demand tends to be more resilient.

We will continue to monitor the environment closely, but our current outlook remains supported by what we are seeing across the customer base today. In mobile, we again outperformed expectations, supported by healthy sell-through and strong execution on new product launches at our key customers. We remain bullish on the long-term RF content opportunity. A stronger unit backdrop and potential for increasing RF complexity driven by AI workloads continue to support our growth outlook. Stepping back, the long-term driver of this business is the steady expansion of a more connected wireless world, with physical AI emerging as the next wave of growth. Future growth is going to be driven by four converging forces.

One, more units: the installed base of wireless devices continues to expand globally. Two, more RF content per device: next-generation standards, including 6G, Wi-Fi 7 and beyond, and satellite connectivity, will drive more bands, more antennas, and more filters into every endpoint. Three, AI-driven workloads: edge inference is placing higher demand on wireless performance, particularly uplink, latency, and power. And finally, four, new form factors: robotics, autonomous platforms, and edge AI devices are emerging as a new generation of connected endpoints. Turning to broad markets. We have nine consecutive quarters of growth, approximately $400 million in quarterly revenue, and double-digit year-over-year growth.

Our three growth engines—Wi-Fi, data center, and automotive—accounted for nearly two thirds of our broad markets business and collectively grew 30% year over year. Let me briefly talk about these three growth engines. One, Wi-Fi. Wi-Fi 7 adoption is accelerating as AI workloads push toward the endpoint. Strong design engagement, solid backlog, and early collaboration with customers on Wi-Fi 8 position us well for continued growth into the next cycle. Two, automotive. The connected car and infotainment are driving growth today, with power and connectivity expanding our footprint further into FY '27. We are engaged with global OEMs and Tier 1 suppliers on multiyear vehicle programs. Three, AI data center.

While still modest in absolute terms, the segment is expected to grow nearly 50% this year. The structural shift to higher data rates and rack density is driving demand for precision timing and advanced power delivery. Skyworks Solutions, Inc. is well positioned across 800-gig and 1.6-terabit platforms with leading hyperscalers, global ODMs, and infrastructure OEMs, as the industry transitions to 400-volt and 800-volt HVDC architectures. Together, these three engines are reshaping the mix of our broad markets business and driving the diversification thesis we have been executing on. In summary, strong quarterly execution and broad-based performance across both mobile and broad markets, with nine consecutive quarters of growth in broad markets and double-digit year-over-year gains. Our outlook remains solid.

Customer demand is healthy, channel inventory is lean, and our portfolio is positioned in segments with structural tailwinds. The Qorvo transaction is proceeding as expected. The regulatory process is on track, and we are confident in delivering the shareholder value. Finally, the long-term setup is compelling: more endpoints, more content per device, AI at the edge, and exposure to secular growth areas like data center, Wi-Fi, satellites, and more. We believe we are well positioned for what comes next. With that, let me turn the call over to Philip for a discussion of last quarter's performance and outlook for Q3 fiscal 2026.

Philip Carter: Thanks, Phil. Skyworks Solutions, Inc. delivered revenue of $944 million, exceeding the high end of our guidance range. During the quarter, our largest customer accounted for approximately 60% of revenue. Mobile represented 58% of total revenue and came in higher than our expectations, driven by healthy sell-through at our top customer and product execution. Broad markets also outperformed expectations, representing 42% of sales, and grew 10% year over year, driven by growth across Wi-Fi, data center, and automotive. Gross profit was $425 million with gross margin of 45%, in line with the midpoint of guidance.

Input costs remain a modest headwind to gross margin, but we continue to do a good job of containing those pressures through cost controls and selective price adjustments. Operating expenses were $236 million, in line with the midpoint of our guidance range. Operating income was $189 million, translating to an operating margin of 20%. Other income was $3 million, and our effective tax rate was 10%, resulting in net income of $173 million and diluted earnings per share of $1.15, [inaudible] above the midpoint of our guidance. We ended the quarter with approximately $1.4 billion in cash and investments, and $1 billion in debt, maintaining a strong balance sheet and ample flexibility to support our strategic and financial priorities.

Looking ahead to Q3 2026, we expect revenue to range between $900 million and $950 million. We anticipate mobile to decline approximately low single digits sequentially, consistent with normal seasonality. We expect broad markets to be up modestly sequentially, representing 43% of sales and up high single digits year over year. Gross margin is projected to be approximately 44.5% to 45.5%, flat sequentially, reflecting seasonally lower volume and higher input costs. We expect operating expenses to be between $235 million and $245 million, as we continue to fund key R&D initiatives while maintaining tight control over discretionary spending.

Below the line, we anticipate approximately $4 million in other expenses, an effective tax rate of 10%, and a diluted share count of 151 million shares. At the midpoint of our revenue outlook of $925 million, this equates to expected diluted earnings per share of $1.03. With that, I will turn it back to Phil for closing remarks.

Philip Gordon Brace: Thank you, Philip. Before we wrap up, a heartfelt thank you to our employees, customers, and partners. And to the Qorvo team, we deeply respect what you have built, and we are energized by the opportunity ahead of us. Your dedication fuels our success and sets the stage for continued leadership and growth. We will now open the call for questions. Operator, please open the line.

Operator: Thank you. Star-1-1 on your telephone and wait for your name to be announced. As a reminder, given time constraints, please limit yourself to one question and one follow-up. Please stand by while we compile the Q&A roster. Our first question comes from the line of Timothy Arcuri with UBS. Your line is now open.

Timothy Arcuri: Thanks a lot. Can you talk a little bit about your content trajectory at your largest customer? I know you talked about this big Android win, and you have talked in the past about feeling like content would be pretty flat on a blended basis this fall. How do you feel about content looking at the next year? With this win, does this bode well for your content at your largest customer?

Philip Gordon Brace: Yes. Look, I think we talked about this in our last call. Thank you for the questions. On our last call, we talked about generally holding share where we needed to hold share. In general, when we look at our content position there, we feel good about it. There has been some industry chatter around different seasonality and things, and we are not seeing anything unusual with respect to that. We feel good about our content, and I think the win at the premier Android segment really emphasizes our technology play and the value proposition we can offer. So I think it bodes really well.

I am excited about it, I am proud of the team for what they did, and I am looking forward to the future.

Timothy Arcuri: Thanks. As a quick follow-up, September is typically up, usually like 13% to 14%, but the market had been a little weak last year. Are there any puts and takes you would call out for the third calendar quarter that it would be any different than the usual up 12%, 13%, 14% sequentially?

Philip Gordon Brace: We are only really guiding one quarter in advance. But what we see so far, book-to-bill remains above one. Our inventories are lean. We are keeping a close eye on it. We hear lots of chatter about it. But right now, we do not see anything that would not be otherwise seasonal for the back half of the year, and we will continue to monitor it closely.

Operator: Thank you. Our next question comes from the line of Chris Caso with Wolfe Research. Your line is now open.

Chris Caso: Yes, thanks. Good afternoon. The first question is with regards to this Android win. If you could give us a little more color behind what this means. Would you expect that this represents share gain for Skyworks Solutions, Inc.? Is it something as a follow-on of an existing platform you have, or would you consider this to be incremental?

Philip Gordon Brace: It is a good question. I am going to be careful answering given the confidential nature of it. It is obviously a customer we have been working with in the past. I do think it represents incremental business for us going forward. It is in the premium part of the segment, and we think the gross margins will reflect that. I think it represents a really good technology statement for us across multiple generations. It is really a testament to the technology we have, but also collaboration with the customer. They would not have done that if they did not think that we could deliver sustained value generation over generation, and that is really what we have done here.

Philip Carter: As a follow-up with regard to gross margins—so as we look at the back half of the year, typically, gross margin is down from Q2 to Q3 on average 70 basis points over the last five years, and we are guiding flat. We are seeing some input costs increase as we are going through the current quarter—incurring expedite fees, looking at gold prices, things like that. But we are actively pursuing cost reductions where we can—fab optimization, utilization rates. We do see a slight increase in broad markets, and that does help a little bit as we look into the next quarter.

Operator: Thank you. Our next question comes from the line of Edward Francis Snyder with Charter Equity Research. Your line is now open.

Edward Francis Snyder: Thanks a lot. Okay, so you got an incremental Android win. It is going to be a billion dollars between here and 2030, which means it is not Apple. You have played with Google before, it sounds like you are winning there, and everything you described suggests that maybe that is a win. In the past, they would bounce between you and Qorvo. I am just trying to get a handle on how sticky this is. I guess the 2030 guidance gives you some answer to that. Do you expect—especially with the merger—there will not be many other choices once this gets done?

Or even if the merger did not go through, would you still think you would have a billion dollars there?

Philip Gordon Brace: It really has absolutely nothing to do with the merger or the opportunity in front of us with Qorvo. I really cannot comment much more than what I said before. It is a multigenerational design with significant RF content. It is a really great opportunity for us, and that is really all that I can say. On the stickiness of it, I would not say anything out to 2030 unless I was confident about the stickiness of it.

Edward Francis Snyder: Very good. My follow-up: you have done a very good job—memory is not affecting you—through the entire industry. Obviously, that is because you decided years ago to exit the China market and focus on your largest customer, and they are not as affected by it. Is there anything out there that would suggest that you would change that strategy? It has gotten much worse. You decided to leave China around 2019, and not playing a big role at Samsung for a reason. I do not think it is competitive; I think you decided not to be there because of the pricing problems at Samsung.

Are you looking out there—is there any reason why you would change that strategy of maybe reentering high end in China or trying to compete for the Galaxy more aggressively at Samsung after the merger with Qorvo?

Philip Gordon Brace: In general, our strategy is to continue to grow our business and do so in a way that grows our business profitably. We will deliver products to any customers—be it Android, iOS, or others—in a way that customers are willing to pay for our value proposition and we get compensated accordingly, and that is what we will continue to look at. It is in our strategic and financial best interest to do so. What is not in our best interest is to engage in designs that are extremely dilutive, in some cases negative. So we will continue to be prudent about how we allocate our resources to maximize the return and benefit for our customers and our shareholders.

Operator: Thank you. Our next question comes from the line of Thomas O'Malley with Barclays. Your line is now open.

Thomas O'Malley: Hey, thanks for taking my questions. First, a follow-up on content. When you gave a little guidance earlier, you talked about phone generation over phone generation. Can you give us an update on how content has trended since then? Traditionally, you have some early design wins late in the year, and then the board really gets set around April. Has anything changed since we last talked at earnings? And then the follow-up is, it seems like you are pointing to normal seasonality for September and December. Historically, when you look at larger customers, you get a yearly forecast, but then as you get a little bit closer, those things change.

Could you talk about what type of lead times you have on changes in order patterns there, so people get comfortable around the idea that you would not see any sort of change as we get closer?

Philip Gordon Brace: Thank you. On the content, we will go back to what we said before. We feel good about our content position. We cannot really comment and front-run our customers, and frankly we do not really know what models are going to sell and how that is going to work. We feel good about our content position, and we will see how that plays out. We do not see anything today that would suggest anything other than normal seasonality. Our lead times are actually quite long, but customers change forecasts all along—we are dealing with some of that now. In general, we do not see anything that suggests abnormal seasonality.

Our book-to-bill is above one, our inventory is low, and we continue to get strong demand signals from pretty much across our customer base at this point. It is something we are keeping an eye on, but at this point, we feel really good about it.

Operator: Thank you. Our next question comes from the line of Christopher Rolland with Susquehanna. Your line is now open.

Christopher Rolland: Thank you for the question. Following on that last question about supply and lead times—if you could elaborate there. And also how it might play into pricing. In your prepared remarks, you talked about select pricing adjustments. If you could talk about that—what that might mean for gross margin as well—that would be great.

Philip Gordon Brace: I will make some high-level comments, and then pass it over to Carter for details. We are dealing with a very dynamic environment. If I look back about twelve months and think about the number of black swan events that we have all been managing—it has been pretty challenging, and the current supply environment is challenging. We are definitely seeing effects of input price increases pretty much across the board.

Our team has done a good job of figuring out ways to keep costs down and manage other things, and we are certainly, where we can, sharing some of the price increases with our customers and trying to be balanced to help offset some of these price increases that we are seeing. It tends to be targeted, and we are trying to manage both the short-term volatility and the long-term sustainability of the business. We are taking a prudent approach.

Philip Carter: Just to add to that, some of the long-life products allow us to increase price and pass those costs on. Over the longer term, we are sticking with our long-term model of 50% to 55% gross margin post-combination with Qorvo. We do see a path to gross margin expansion in terms of favorable mix shift, lower cost structure through fab optimization, and higher utilization. We are excited about the future, the roadmap, and margin improvement.

Christopher Rolland: Excellent. Perhaps a follow-up on the Android win. Could you talk about how you got that win, how this product is differentiated in terms of getting the pricing that you wanted? And does this make you rethink the Android opportunity longer term, or is this more of a one-off opportunity rather than a category?

Philip Gordon Brace: We were able to offer a technology-advantaged solution that we believe will enable our customer to make a very competitive product. By having a multigeneration design win with that customer, it enables us to focus engineering resources to deliver generation over generation. We think that is very competitive, and the customer supported that. With respect to longer-term opportunities, as I reiterated earlier, it is in our strategic best interest to continue to grow the business where we can. We are experts in RF wireless communications. To the extent that we can develop solutions and products that customers want to buy at economics that make sense for both of us, we are going to continue to do that.

When the economics are upside down, that is when it does not work. We will continue to be financially disciplined about allocating our resources, R&D, technology, and capability to things that provide customer benefit and deliver financial return for us and our shareholders.

Operator: Thank you. As a reminder, if you would like to ask a question, please press 1-1 and wait for your name to be announced. Our next question in the queue comes from the line of Cowen. Your line is now open.

Analyst: Hi. Thanks for taking my question. I have two of them. What is your total China revenues roughly this year? And within that, is the China handset revenue really small, like less than $10 million a year right now?

Philip Carter: Looking at China, our overall business annually would be less than $200 million, and handset would be less than $20 million.

Analyst: Got it, thanks. As a quick follow-up, on the broad market side, if I remember right, your data center revenues are still under $100 million and your auto revenues are probably around $250 million a year. Is that still the right ballpark? And how do you expect that to grow as we look forward?

Philip Carter: Yes, those are about right from a number standpoint. We see really good growth, as Phil mentioned in the prepared remarks, around those areas. In terms of ranking, data center is growing a lot stronger than our automotive business, but auto is a great, healthy business where we are getting good design-win traction. We are excited about both, and we see good bookings in those areas.

Operator: Thank you. Our next question comes from the line of Peter Peng with JPMorgan. Your line is now open.

Peter Peng: Thanks for taking my question. When you think about that Android customer—the $1 billion over the next couple of years—should we think about it as being linear in terms of revenue opportunity, or is it rising each year from generation over generation? Any color on how we should factor that into the model?

Philip Gordon Brace: We expect it to be rising year over year. We expect it to be a tailwind to growth from now through 2030.

Peter Peng: Got it. And then just on RF content per device at your largest customer—I think it has been kind of stagnant for a number of years. Looking out the next couple of years, and you talked about some of the drivers—AI at the edge driving higher demand—can you talk about RF content potentially accelerating and growing?

Philip Gordon Brace: Absolutely. As we look at next year, we expect blended content to be roughly flat, with potential for some tailwinds as they migrate toward the internal modem, which opens up some new opportunities for us. It is difficult to predict different models and how that is going to work, but generally we feel good about our content. Going forward, we are seeing more RF complexity driven by an increased number of bands, increased MIMO capability, increased power requirements, and smaller devices. We are seeing that across the board, and that should be a tailwind for content.

As we zoom out and look at the mobile business in general, there will be more units out there; the more units put out there now, the more come up for refresh. There is more RF content coming, then we get into 6G. We have new form factors and shortening refresh cycles. We have a lot of tailwind we are excited about. We will keep monitoring that and keep executing our playbook.

Operator: Thank you. Ladies and gentlemen, that concludes today's question and answer session. I will now turn the call back over to Mr. Philip Gordon Brace for any closing comments.

Philip Gordon Brace: Great. Thanks, everybody, for joining the call today. We look forward to seeing you at upcoming conferences throughout the quarter.

Operator: Ladies and gentlemen, this concludes today's conference call. We thank you for your participation, and you may now disconnect.