Qorvo, Inc.

Welcome to the Corvo Inc. Q3 2021 conference call. Today's conference is being recorded. If there's time, I'd like to turn the conference over to Douglas DeVito, Vice President of Investor Relations. Please go ahead.

Thanks, James. Thanks very much, everybody. Welcome to Corvo's fiscal 2021 third quarter earnings conference call. This call will include forward-looking statements that involve risk factors that could cause our actual results to differ materially from management's current expectations. We encourage you to review the Safe Harbor Statement contained in the earnings release published today, as well as the risk factors associated with our business in our annual report on Form 10-K, followed with the SEC, because these risk factors may affect our operations and financial results. In today's release and on today's call, we provide both GAAP and non-GAAP financial results. We provide this supplemental information to enable investors to perform additional comparisons of operating results and to analyze financial performance without the impact of certain non-cash expenses or other items that may obscure trends in our underlying performance. During our call, our comments and comparisons to income statement items will be based primarily on non-GAAP results. For complete reconciliation of GAAP to non-GAAP financial measures, please refer to our earnings release issued earlier today available on our website at corvo.com under investors. Joining us today are Bob Rugworth, President and CEO, Mark Murphy, Chief Financial Officer, James Klein, President of Corvo's Infrastructure and Defense Products Group, and Eric Creviston, President of Corvo's Mobile Products Group, as well as other members of Corvo's management team. And with that, I'll turn the call over to Bob.

Thank you, Doug, and thanks to everyone for joining our call. Corvo exceeded third fiscal quarter guidance on revenue, gross margin, and EPS. Our performance was supported by multi-year technology upgrade cycles and was broad-based across markets and customers. The Corvo team is executing very well and we are pleased with our operating performance. The growth drivers in Corvo's markets are supported by durable long-term trends in smartphones and 5G units are set to approximately double year over year. 5G also presents opportunities beyond smartphones with advanced network capabilities for more data, lower latency, and machine-to-machine communications. We expect our technologies will be increasingly critical to cloud gaming, connected car, industrial IoT, remote medicine, smart homes, and other growth categories. In Wi-Fi, We are early in the rollout of Wi-Fi 6, and industry analysts expect rapid adoption to continue. Our next-generation front-end modules and BAW-based filtering products are optimized for higher frequency and wider bandwidths of Wi-Fi 6 and 6E, enabling faster upload and download speeds, increasing capacity, and improving efficiency. Across our markets, complexity is increasing as functionality is added within shrinking form factors while more demanding next-generation specifications must be met. This is favoring higher performance, more densely integrated system solutions from proven suppliers with large-scale manufacturing expertise. Take, for example, the migration to dual-transmit architectures beginning in the premium tier of smartphones for 5G. Dual transmit architectures require integrated transmit and receive filtering in the traditional receive only diversity path. This requires better performing, more functionally dense solutions, making high performance ball multiplexing a proven differentiator. Industry analysts estimate there were over 250 million 5G phones sold in 2020. For 2021, we forecast approximately 500 million 5G phones. Within these phones, the front end content is increasing $5 to $7 versus 4G, including in the mid-tier where content can approximately double. The addition of 5G is driving a shift from discrete products to higher value content, including our highly integrated solutions. For the 5G reference designs ramping now Corvo was the first to integrate filters, switching, power amps, LNAs, and CMOS control in fully shielded compact solutions. In doing so, we address customer size, performance, and time-to-market challenges. Demand has been strong for these complete main path solutions, and customers are increasingly sourcing all three, including the low, mid-high, and ultra-high band placements. When combined with our P-Mix, tuners, antenna flexors, and dual connectivity modules, Corvo offers customers a compact front-end solution with minimal placements, delivering world-class performance. As a result, we enjoy increasingly collaborative relationships with our customers. During the quarter, we were recognized by two leading Android manufacturers with highly selective annual awards. Corvo was the sole RF supplier to win Vivo's Excellent Quality Award for 2020. And we were the sole electronics supplier to win OPPO's esteemed Joint Development Award. We're extremely proud of both honors. As I referenced earlier, during the quarter, we increased shipments of our complete main path solutions across the leading 5G baseband. We also secured new design wins for our next generation complete main path solutions in support of upcoming Android 5G launches. For the diversity path, we launched our first generation of dual connectivity module for the mid and high bands and commenced shipments to the leading Android smartphone manufacturer. We also released a next generation ball process, which reduces insertion loss, increases bandwidth in ultra high band, and Wi-Fi 6E applications. In mobile Wi-Fi, we began production shipments of our Wi-Fi 6E solutions to top Android OEMs, increasing capacity and lowering latency in a range of smartphones and mobile devices. In ultra-wideband, we extended our capabilities to include open, fully supported system solutions, enabling ultra-precision location applications in mobile, IoT, and automotive markets. During the quarter, we increased our ultra-wideband customer engagements in a broadening range of consumer applications, including tracker tags, smart speakers, smart TVs, and other smart home appliances. Customers and channel partners are evaluating a broad range of applications, and we continue to believe ultra-wideband adoption in smartphones will be the catalyst for a growing ecosystem of connected devices. We see ultra-wideband proliferating quickly and representing an exciting opportunity for Corvo. In IDP, we're very proud to have been selected by the National Institutes of Health for its Rapid Acceleration of Diagnostics Initiative, or RADx, to add COVID-19 testing capacity. In this program, we will use our Omnia test platform, a complete test solution enabled by Corvo's high-frequency bot. This platform is currently pending emergency use authorization from the Food and Drug Administration. Corvo's antigen testing has demonstrated high levels of sensitivity and specificity in clinical studies. That means it's capable of producing accurate results with very low levels of false readings. We believe this BOS sensor technology may be able to deliver a new approach to diagnostic testing ultimately providing central lab testing accuracy at the point of care. Elsewhere in IDP, we continue to support a broad range of multi-year trends, including 5G, Wi-Fi 6 and 6E, GAN defense, radar and comms, programmable power management, C to V2X, automotive Wi-Fi, and ultra-wideband. Our team has done an outstanding job developing products and ramping production to support initial 5G base station deployments in Asia. Today, we're in the early stages of multi-year rollouts, and we have strong momentum as 5G continues to deploy. We've been selected by multiple OEMs to supply GaN PAs in addition to our small signal components and modules, and we see the focus on power consumption, bandwidth, and higher frequencies supporting the continued migration to GaN PAs. During the quarter, Corvo secured design wins with multiple base station OEMs to support 5G C-band in the US for which the spectrum options are in the process and initial deployments are expected later this year. We also received the Best Comprehensive Performance Award from ZTE. recognizing our 5G portfolio and customer support during the initial rollout of 5G base stations. In defense, we achieved strong growth in domestic radar and communications applications and GAN defense products for international radar programs. In connectivity, we ran shipments of our 5 gigahertz Wi-Fi 6 PAW filters and sampled are 6 gigahertz Wi-Fi 6E front-end modules for routers and gateways, maximizing throughput and range for high bandwidth applications such as video conferencing and online gaming. Demand for our Wi-Fi 6 solutions has been strong across MSOs and retail segments. And we see continued strength as Wi-Fi 6 deployments are still in the early phases. In the connected car, we were selected to supply 5G LTE, C, V2X, and Wi-Fi automotive qualified products to multiple OEMs, including Audi, BMW, and Volvo. In low-power wireless, Corvo was selected to supply the leading television manufacturer, our low-power multi-protocol SOC, and custom software, enabling a solar-charging remote control. Before handing the call over to Mark, I want to say a word about Corvo's workforce. The team delivered an outstanding performance in the December quarter. They adapted quickly in a dynamic environment and helped support exceptional results. I'm extremely proud of their responsiveness and dedication to our customer success. As 5G, Wi-Fi 6, and 6E, Ultra Wideband, and other connectivity protocols are rolled out globally. Corvo is well-positioned to delight customers and expand our technology reach. And with that, I'll hand the call over to Mark.