QUALCOMM Incorporated

Ladies and gentlemen, thank you for standing by. Welcome to Qualcomm's fourth quarter and fiscal year 2023 earnings conference call. At this time, all participants are in a listen-only mode. Later, we'll conduct a question and answer session. If you'd 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 November 1st, 2023. Playback number for today's call is 877-660-6853. International callers, please dial 201-612-7415. The playback reservation number is 137-4122. I would now like to turn the call over to Mauricio Lopez-Sedoyan, Vice President of Investor Relations. Mr. Lopez-Sedoyan, 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, Cristiano Mon.

Thank you, Mauricio, and good afternoon, everyone. Thanks for joining us today. In fiscal Q4, we delivered non-GAAP revenues of $8.7 billion in non-GAAP earnings per share of $2.02 above the high end of our guidance. Revenues from our chipset business of $7.4 billion reflect a more stable Android handset environment. Licensing business revenues were $1.3 billion. During the quarter, We also made significant progress on our leading technology and product roadmaps while improving operational efficiency. We remain fully focused on our future growth and diversification opportunities. Let me now discuss key highlights from the business. As we enter the age of generative AI, we're seeing an unprecedented pace of innovation. On-device GenAI is evolving in parallel with GenAI in the cloud, enabling entirely new use cases. It has the potential to change how we interact with our devices, making the user experience more natural, intuitive, relevant, and personal, with increased immediacy, privacy, and security. We have quickly established Qualcomm as a leader in on-device Gen AI for smartphones, next generation laptops, XR, and automotive, and we are well-positioned to benefit from this opportunity. we expect high-performance on-device AI to become a requirement over the next few years, driving content, units, or both. Our Snapdragon platform is highly differentiated from its competitors. First, we significantly increase the AI processing performance and power efficiency of our best-in-class NPU, CPU, and GPU. Second, We are collaborating with multiple partners and ecosystems to enable a host of consumer and productivity-based AI models running natively on our platform. Third, we're enabling multi-billion parameter Gen AI models to run continuously and concurrently for multiple use cases, including multimodal. For example, in the latest Snapdragon 8 Gen 3 smartphone platform, State-of-the-art large language models, such as LAMA and Bai Xuan, up to 10 billion parameters are running at up to 20 tokens per second. And large vision models, such as stable diffusion, can generate images from text in less than one second, with ultra-low power consumption. As always running on-device GenAI becomes pervasive, We believe it will create one of the most significant changes in user experience, similar to the transition from the future phone to the smartphone and the introduction of the graphical user interface for PCs. Snapdragon will play a significant role in this transformation. We also reached an important milestone in our expansion into PCs with the announcement of our Snapdragon X Elite platform. It is the result of a relentless pursuit to create the ultimate intelligent computing experience and establish Snapdragon as the industry leader in performance and power efficiency. The Snapdragon X Elite includes our first implementation of the custom Orion CPU, which exceeds the multi-threaded CPU performance of any x86 or ARM competitor in its class. It also matches the single-threaded CPU peak performance of the leading x86 CPU competitors at 70% less power. Additionally, our premium integrated Adreno GPU delivers up to two times faster performance than the competition at ISO power or matches competitor peak PC performance at 74% less power. Snapdragon X Elite also features our newest Hexagon NPU. With 45 tops of performance, the Hexagon NPU is capable of running Gen AI models with over 13 billion parameters on device. In total AI performance of the Snapdragon X Elite across CPU, GPU, and NPU is 75 tops, the highest in the industry. Microsoft is redefining the entire Windows experience with the AI copilot, and the Snapdragon X Elite is built from the ground up for this opportunity. We look forward to PCs powered by Snapdragon X Elite from leading OEMs starting mid-2024. The merging of physical and digital spaces remains a significant future opportunity for Qualcomm, and we recently launched the Snapdragon AR1 platform our first dedicated platform for smart glasses. AR1 Gen1 was developed in close collaboration with Meta and powers the new Ray-Ban Meta smart glasses. It features a dual ISP camera system for premium photos and videos, as well as powerful on-device AI for image enhancement, virtual assistance, real-time translation, visual search, and more. Together with Meta, we're developing next-generation technologies to create the future of spatial computing. The AR1 Gen1, along with the previously announced Snapdragon XR Gen2, are a testament to the strength of this long-standing partnership. Across the industry, Snapdragon remains the platform of choice for all leading VR, MR, and AR designs. In networking, We continue to be a global Wi-Fi leader across enterprise and home networks, as well as broadband gateways. Our Wi-Fi 7 solutions are seeing strong traction with more than 350 design wins across all categories today. We recently announced several new collaborations, including with Charter Communications in the U.S. and EE in the U.K., both of which are preparing to roll out enhanced next-generation Wi-Fi 7 connectivity to their residential and small and medium-sized business customers. We're excited about the launch of our fiber gateway platform, which adds 10 gigabit passive optical network capabilities to our portfolio. With fiber, in addition to 5G and Wi-Fi 7, we're now positioned to lead in next-generation broadband solutions. Additionally, Our unique service-defined Wi-Fi technology signature feature introduced with our Wi-Fi platforms offers a unified data flow management architecture from cloud to device. It delivers orchestration, classification, scheduling, and insights to enable the end-to-end management of home networks and real-time optimizations across devices. In automotive, the digital transformation of the industry continues to bring new levels of computing, intelligence and cloud connectivity to the vehicle. These trends are driving new user experiences, advancements in driver assistance, autonomy and safety. They also offer the potential for new revenue opportunities as vehicles gain the ability to evolve with over-the-air updates and digital services. The vehicle is becoming software-defined and the Snapdragon digital chassis remain at the center of this transformation. We are pleased that our digital chassis solutions will bring advanced capabilities to the upcoming Cadillac Escalade IQ, which is planned for commercial production in 2024. The Cadillac Escalade IQ will be equipped with the Snapdragon Cockpit, Snapdragon Auto Connectivity, and Snapdragon Ride platforms. Additionally, We're proud of our partnership with BMW for all vehicles as well as the upcoming Noya Cluster. We're also excited that the Snapdragon Digital Cockpit and connectivity solutions now power the new Mercedes-Benz User Experience starting with the 2024 E-Class Sedan. We recently expanded our digital chassis offering with the launch of two new platforms for two-wheelers and other vehicle classes such as motorcycles, e-bikes, scooters, and all-terrain vehicles. Our new platform design wins in launches with Gogoro, Harley-Davidson, and others are receiving positive feedback from the ecosystem on their ability to advance technology development and bring new user experiences to these vehicles. Finally, we announced a new long-term relationship with Amazon Web Services to enable automakers to integrate cloud technologies into their vehicle development lifecycle. The offering combines the Qualcomm Cloud AI100 solution, our Snapdragon Ride platforms, as well as AWS breadth of services and capabilities. This will advance the future of software-defined mobility and change how vehicles are designed and developed. In handsets, we announced our latest premium mobile platform, the Snapdragon 8 Gen 3, which delivers industry-leading performance and extraordinary experiences to consumers for the upcoming Gen AI era. Some key features include intelligent capture with the world's smartest AI-powered camera, console-level gaming with ray tracing with global illumination, studio-quality audio, the world's first X-PAN technology, best-in-class connectivity, and the world's fastest on-device AI processing on a smartphone. We look forward to flagship device launches powered by the Snapdragon 8 Gen 3 by global OEMs and smartphone brands including Xiaomi, Honor, Oppo, Vivo, OnePlus, Sony, and more. In addition, We recently entered into an agreement with Apple to supply Snapdragon 5G modem RF systems for smartphone launches in 2024, 2025, and 2026. This agreement reinforces our track record of sustained leadership across 5G technologies and products. We are proud of our ongoing relationship with Apple. As we look forward, our technology roadmap has never been stronger and the fundamentals of Qualcomm's growth drivers remain unchanged, with significant opportunities in the coming years. We continue to focus on stockholder returns and executing on our ongoing diversification opportunities while maintaining operating discipline. I would now like to turn the call over to Akash.