QUALCOMM Incorporated

Ladies and gentlemen, thank you for standing by. Welcome to the Qualcomm third quarter and fiscal 2021 earnings conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session. If you would like to ask a question during this time, press star, then the number one on your telephone keypad. To withdraw your question, press star, then the number two. If you're using a speakerphone, please pick up your handset before pressing the numbers. Please limit your questions to one question and one follow-up. As a reminder, this conference is being recorded July 28th, 2021. The playback number for today's call is 877-660-6853. International callers, please dial 201-612-7415. The playback reservation number is 137-20943. I would now like to turn the call over to Mauricio Lopez-Hedoyen, Vice President of Investor Relations. Mr. Lopez-Hedoyen, please go ahead.

Thank you and good afternoon everyone. Today's call will include prepared remarks by Cristiano Mon and Akash Palkawala. In addition, Alex Rogers and Don Rosenberg will join the question and answer session. You can access our earnings release and a slide presentation that accompanied this call on our investor relations website. In addition, this call has been webcast on Qualcomm.com and a replay will be available on our website later today. During the call, we will use non-GAAP financial measures as defining Regulation G, and you can find the related reconciliations to GAAP on our website. We will also make forward-looking statements, including projections and estimates of future events, business or industry trends, or business or financial results. Actual events or results could differ materially from those projected in our forward-looking statements. Please refer to our SEC filings, including our most recent 10-K which contain important factors that could cause actual results to differ materially from the forward-looking statements. And now to comments from Qualcomm's Chief Executive Officer, Cristiano Amon.

Thank you, Mauricio, and good afternoon, everyone. Thanks for joining us today. This is an amazing time to be part of Qualcomm. The need for our technologies and products has never been more evident. We are seeing demand across virtually every industry. because our products and technologies are essential ingredients that enable digital transformation in the cloud economy. We are leading and expect to continue to lead in mobile. In addition, we also expect to lead the evolution of the connected intelligent edge by transforming connectivity and processing in cars, the enterprise, the home, smart factories, next generation PCs and tablets, XR wearables, and many more. This is the foundation of our revenue diversification strategy. The strong performance in our business has led to fiscal third quarter revenues and earnings per share that exceeded the high end of our guidance. Most importantly, we are on track to realize approximately $10 billion in combined revenues across IoT, RF front end, and automotive in fiscal year 21, validating the positive financial impact of our revenue diversification strategy. Let me provide you now with some additional details. The foundation of our IoT strategy is edge connectivity and processing for the growing cloud-based economy. In consumer, we're seeing strong demand driven by a consumer electronics upgrade cycle and growth in emerging product categories such as XR and wearables. In edge networking, we had another great quarter with continual momentum driven by the enterprise transformation of the home and the second wave of enterprise demand driven by return to the workplace. We're also seeing rapid adoption of Wi-Fi 6 and increase demand for both 4G and 5G mobile broadband devices. In industrial, our product offerings are purpose-built for key verticals such as transportation and logistics, warehousing, video collaboration, smart cameras, retail, and more. We are at the forefront of enabling this new ecosystem and also making 5G for industrial applications a reality. We are becoming the connected intelligent edge partner of choice. As demand for automotive solutions increase, we're pleased to report that our automotive revenue design wind pipeline has reached approximately $10 billion, and based on our third quarter results, our annualized automotive revenue run rate is now over $1 billion. This reflects continued traction across global automakers and Tier 1 customers. Our automotive telematics and connectivity platforms, digital cockpit, and CV2X solutions are at the intersection of key automotive industry trends, such as the continued growth of connected vehicles, the transformation of the in-car experience and vehicle electrification. As the digital chassis becomes one of the most important assets of automakers, we remain well positioned for continued growth as a leading technology partner for the industry. In RF front-end, we believe we are on track to become the largest smartphone RF front-end supplier by revenue. Looking forward, we expect to have technology leadership across virtually all handset RF front-end components while continue to lead in modem-to-antenna system performance. Now, I will provide an update on two key drivers for our handset revenues. First, we continue to be positively impacted by the growth in 5G and changing OEM landscape, resulting in the expansion of our dressable handset opportunity. Our Snapdragon 8 series mobile platforms have shown significant design win momentum. More than half of our 5G smartphone design wins to date are using our 8 series. In total design wins for our Snapdragon 888 increased more than 20% quarter over quarter. We're also seeing strong traction with our Snapdragon 7 series mobile platforms with nearly 40 new devices shipped or announced during this last quarter alone. Based on our design win tractions, and performance of our customers, we have increased confidence in growing our handset revenues. Snapdragon premium and high-tier solutions remain synonymous with Android flagship mobile experiences. Second, we're still on track to materially improve supply by the end of the calendar year. We're securing incremental capacity across both leading and mature nodes and optimizing the allocation of our products across the global supply chain. We're also making progress with our multi-sourcing initiatives. In fiscal Q3, the Snapdragon 778G, the first of several products from our multi-sourcing initiatives, was commercialized in record time and is now shipping in volume. Additional products from our multi-sourcing initiatives will be commercialized in the coming months. I would like to thank our employees, our suppliers, and our customers for helping us navigate the challenging supply environment. In our licensing business, our third quarter results reflect the strength of our patent portfolio and the stability of our licensing program. We are a global 5G IP leader with more than 150 5G license agreements signed to date, up from more than one-third last quarter. We continue to develop and patent new essential innovations for future releases of 5G, and we expect 5G to have a longer lifecycle than prior generations due to its broad application across multiple industries. I would now like to turn the call over to Akash.