Qorvo, Inc.

Good day and welcome to the Corvo Inc. Q1 2022 conference call. Today's conference is being recorded. And now at this time, I'd like to turn the conference over to Mr. Douglas Toledo, Vice President of Investor Relations. Please go ahead, sir.

Thanks very much, Cody. Hello, everybody, and welcome to Corvo's fiscal 2022 first 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 and our annual report on Form 10-K filed with the SEC, because these risk factors may affect our operations and financial results. In today's release and on today's call, we will 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 Bruggerwith, President and CEO, Mark Murphy, Chief Financial Officer, James Klein, President of Corvo's Infrastructure and Defense Products Group, 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 it over to Bob.

Thank you, Doug, and welcome everyone to our call. First, the Corvo team delivered an exceptional June quarter, Revenue, gross margin, and EPS were each above guidance. Customer demand during the quarter was broad-based and included recently released product categories, including 5G diversity receive modules, MEMS-based touch sensors, and Wi-Fi 6 eFEMs, to name a few. Our R&D teams are relentlessly advancing technologies that enable more complete, integrated solutions and increase differentiation we are partnering with leading customers serving them where we are most valued in introducing new products and technologies that expand our addressable markets we are pleased with ongoing design activity we are locking in wins and we expect the demand environment to remain robust in the smartphone market 5g devices are adopting new architectures and adding functionality to that enhance performance and create new challenges related to current consumption, board space, and handset design resources. To address these challenges, handset manufacturers are selecting more highly integrated solutions that deliver superior performance. For Corvo, the content opportunity in a 5G device increases by $5 to $7 when compared to a 4G device. We expect handset units to grow 5% to 10% this year, with 5G doubling to around 550 million units. In 2025, 5G units are expected to be approximately 80% of total units. In other connectivity markets, new applications are proliferating, supported by generation over generation advancements in Wi-Fi, Bluetooth, Zigbee, Thread, ultra-wideband, and other wireless protocols. In a growing number of applications, multiple wireless standards coexist and operate concurrently. As an example, one of the largest smart home providers recently integrated numerous low-power wireless protocols into its distributed Wi-Fi 6 router, creating infrastructure for seamless whole-home operability. We expect this integration trend to continue. Our expertise in areas including product design, software support, and system solutions enable us to simplify our customers' product development efforts while significantly enhancing the end user experience. Outside of connectivity markets, the expanding opportunities are driven by a diverse set of underlying upgrade cycles. Brushless DC motors are replacing larger, less efficient conventional DC motors. Solid-state drives are replacing slower and less reliable hard disk drives, and touch sensor solutions are replacing less functional traditional buttons. We also expect RF-based biotechnology testing will enable central lab performance at the point of care. We expect our first commercial orders for our Omni test platform by the end of the year. Turning to the June quarterly highlights. In 5G handsets, customer demand for highly integrated modules is expanding. During the quarter, we launched our next generation complete main path solution, which includes low-band, mid-high-band, and ultra-high-band modules, offering higher output power and enhanced MIMO support for upcoming 5G phones. For the diversity path, we began sampling our first 5G DRX. a sub-six ultra-highband placement offering best-in-class received sensitivity. These main path and diversity path solutions integrate filtering and amplifiers that were formerly discrete, helping our customers to save board space, improve device performance, and accelerate product development efforts. Also during the quarter, we announced the interoperability of our family of ultra-wideband products with Apple's U1 chip and the nearby interaction protocol. Corvo's ultra-wideband solutions provide a superior level of accuracy, reliability, latency, and security when compared to traditional technologies like Wi-Fi, BLE, and NFC. In addition to remote access to our cars and homes, ultra-wideband will enable new applications in the connected home, indoor navigation, contactless payment, factory automation, and other use cases. With more in-house software capability from our recent 7Hugs acquisition, we now offer a complete solution, and we're working with customers on products combining our ultra-wideband hardware with our latest software release, shortening their time to market. We see a growing set of applications for our ultra-wideband solutions, and customer design activity is accelerating. In Wi-Fi for handsets, we secured new reference design engagements with our Wi-Fi 6e FEMs. These chip-on-board FEMs reduce insertion loss and enhance handset design flexibility versus system-in-a-package solutions by enabling placement closer to the antenna. Leading Android manufacturers are moving from system-in-a-package placements to best-in-class RF solutions. And Corvo is winning on the strength of our product design, performance, and customer support. In automotive, we achieved record revenue, up more than 80% year over year in support of automotive OEMs in the US, Europe, and in Asia. Growth was driven primarily by the increased demand and expanding connectivity requirements for Wi-Fi, V to X, LTE, and 5G. Content growth also included our touch sensor solutions which automotive OEMs are using to enable smart interiors. This is a new growth category for Corvo, and we have secured design wins in support of multiple automotive customers. To enhance the functionality of our touch sensor solutions and foster new use cases, we have integrated infrared capabilities, a milestone achievement for our sensor team. For the smart home, we partnered with a leading supplier of home mesh networks to introduce the first Wi-Fi 6 router with integrated BLE thread and ZigBee multi-protocol operation. This leveraged our concurrent connect technology. We also secured a ball filter design win with a leading supplier of high-end audio speakers to support the pairing of Bluetooth Low Energy and Wi-Fi 6. As a member of the Connectivity Standards Alliance, and an early participant in the upcoming matter connectivity standard, Corvo stands to benefit as multi-protocol seamless interoperability drives IoT adoption and growth. In power management, we released a 40-volt motor control solution that supports the ongoing transition to higher voltage battery power tools. Demand for our motor control and power management products has been very strong, driving growth in applications from appliances and battery power tools to enterprise compute, laptops, and gaming. We are seeing demand for brushless DC motors expand into lower cost power tools and smaller appliances, given the advantages in efficiency, size, and reliability. We're also leveraging the configurability of our power management solutions to address new applications in defense and other markets. In infrastructure, we increased shipments to multiple OEMs in support of 5G sub-6 gigahertz, massive MIMO, and macro deployments in the U.S., Japan, Korea, and Canada. We also achieved initial design wins supporting a massive MIMO deployment in India, and we secured BOS filter design wins for 3.5 gigahertz and 4.9 gigahertz 5G small cells with a major China-based OEM. New product launches included GAN integrated PA modules for massive MIMO systems and a family of high-efficiency power amplifiers for 5G small cells serving densely populated areas. Across our markets, there are strong secular tailwinds. Connectivity is proliferating and complexity is increasing, which is expanding our growth opportunities. We supply best-in-class products and our investments in new product areas and differentiated technologies are extending our technology leadership and broadening our reach. As our June results and September guidance demonstrate, end market demand is broad-based and robust, and our outlook is strong. And with that, I'll hand the call over to Mark.