QUALCOMM Incorporated

Ladies and gentlemen, thank you for standing by. Welcome to the Qualcomm third quarter fiscal 2022 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 are 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 27, 2022. The playback number for today's call is 877-660-6853. International callers, please dial 201-612-7415. The playback reservation number is 137-311-34. 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 Palakawala. In addition, Alex Rogers 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 today, we will use non-GAAP financial measures as defined in 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 the comments from Qualcomm's President and Chief Executive Officer, Christian Omon.

Thank you, Mauricio, and good afternoon, everyone. Thanks for joining us today. I'm very pleased with our performance in fiscal Q3 and how we continue to execute on our long-term vision of enabling a world where everyone and everything is intelligently connected. As we continue to scale our One Technology roadmap across new industries and applications, we are transforming Qualcomm from a communications company for the mobile industry into a connected processor company for the intelligent edge. This quarter, we delivered revenues of $10.9 billion in non-GAAP earnings of $2.96 per share, driven by solid results in both our chipset and licensing businesses. In our chipset business, revenues of $9.4 billion were up 45% year-over-year, with record revenues in IoT and automotive, demonstrating the success of our diversification strategy. Before I highlight a few notable milestones this quarter. I would like to update you on an important development in our relationship with Samsung. We're very pleased to report that Qualcomm and Samsung have entered a new multi-year agreement starting in 2023, expanding the use of Snapdragon platforms for future premium Samsung Galaxy products globally. This validates that Snapdragon is the technology platform of choice for for premium Android experiences. In addition to Galaxy smartphones, the agreement includes PCs, tablets, extended reality, and more. We have also agreed to a seven-year extension of our patent license agreement with Samsung, taking the license through the end of 2030 with the same royalty terms. The extension encompasses 3G, 4G, and 5G technologies and devices and will also include future 6G standards and products. This license agreement is a significant QTL milestone event. Samsung is the world's largest smartphone supplier by unit volume with a well-developed portfolio of patents. The extended license agreement with Samsung demonstrates the tremendous ongoing value of our patent portfolio, our innovation, and our long-standing leadership in driving the important and foundational elements of the mobile roadmap. The extended Samsung license agreement is an important benchmark for the long term and adds significantly to the stability of the QTL program going forward. Let me now share some of the key achievements from the quarter. In automotive, the Snapdragon digital chassis is fast becoming the industry's platform of choice and is enabling the transition to next-generation vehicles. We are very pleased with the continued traction and design wins across global automakers and Tier 1 partners. Our automotive design win pipeline is now over $19 billion, up approximately $3 billion since fiscal Q2. This includes the design win with the Volkswagen Group's software company, Cariad, to power Volkswagen's future automated driving solutions. In consumer IoT, we continue to execute on opportunities across tablets, XR, PCs, and smart consumer devices. For personal computing, we're continuing to drive the inevitable transition to ARM. We are on track to deliver Windows-owned Snapdragon compute platforms for next-generation PCs powered by our custom CPUs while redefining mobile productivity and on-device AI. To support the accelerating transition to ARM-based computing, Microsoft recently announced Project Volterra, a new developer kit powered by the Snapdragon compute platform featuring the Qualcomm AI engine. They also announced a comprehensive end-to-end ARM-native toolchain for Windows application developers, including Visual Studio, Visual C++, .NET, and more. In edge networking, we launched four new Networking Pro Series Wi-Fi 7 platforms, the award's most scalable Wi-Fi 7 portfolio, initiating a new era of 10 gigabits per second Wi-Fi for enterprise access points, Wi-Fi mesh, carrier gateways, and premium home routers. We also continue to see strong momentum in industrial IoT and recently announced two new 5G-connected robotics platforms with enhanced AI capabilities, computer vision, 5G connectivity, and a comprehensive customizable SDK to power next-generation robotics and drones, including autonomous mobile robots, AMRs, highly automated manufacturing robots, and more. These achievements demonstrate our ability to continue to grow across automotive and the broader IoT categories, in addition to our front-end enhancements. Our one technology roadmap is the cornerstone of the strategy, with unparalleled leadership across not one, but multiple technologies required for the connected intelligent edge. This includes on-device AI, low-power, high-performance compute, computer vision, advanced connectivity, and more. Importantly, as we expand into new growth areas, we're driving our technologies to meet the highest performance requirement for each application and serve as the industry design point. For example, our dedicated automotive SOCs and accelerators for level 3 and level 4 autonomous driving can deliver up to 700 trillion operations per second tops of AI processing. Our RB6 robotics platform brings advanced edge AI and video processing capabilities, support for up to seven concurrent cameras, and up to 200 tops. And we believe our upcoming custom-designed CPUs will redefine computing performance for Windows PCs. Of particular note is our significant momentum in AI. We recently launched the Qualcomm AI Stack, which unifies our existing best-in-class AI software solutions into a single package that works across all Qualcomm platforms. The Qualcomm AI Stack is positioned to become the platform for AI at the edge. The Qualcomm AI stack supports all AI frameworks, including TensorFlow, PyTorch, and ONNX, as well as AI runtimes, such as TensorFlow Lite, TensorFlow Lite Micro, and ONNX Runtime. We also have a rich variety of OS support, including Android, Windows, Linux, QNX, Ubuntu, and others. With this new offering, OEMs and developers can now develop and optimize AI models once then move the same model across different Qualcomm products and tiers for a true develop-once-deploy-anywhere model. We believe the Qualcomm AI Stack portfolio is a revolutionary step in scaling high-performance, low-power, on-device AI processing. These solutions demonstrate how our one technology roadmap is transforming Qualcomm from a wireless communications company for the mobile industry to a connected processor company for the intelligent edge. Lastly, as we continue to move forward and execute on our strategy, we're mindful of the challenging economic environment and we remain disciplined on investments that drive sustainable differentiation and stockholder value. We're focused on customers and industries that drive stable, long-term growth. We believe the industry trends that are driving demand for our technologies remain unchanged, and continue to validate our strategy, positioning us well for the long term. We're still on track to expand our addressable market by more than seven times to approximately $700 billion in the next decade. Before I turn the call over to Akash, I would like to invite you to join us in New York on September 22nd at our first ever Automotive Investor Day event. Qualcomm is the leading automotive technology platform provider for next-generation vehicles. We will demonstrate how the Snapdragon digital chassis is enabling the transformation of the automobile and continuing to drive growth in our design wind pipeline. I would now like to turn the call over to Akash.