Skyworks Solutions, Inc.

Good afternoon and welcome to Skyworks Solutions' fourth quarter fiscal year 2023 earnings call. This call is being recorded. At this time, I will turn the call over to Raji Gill, Vice President of Investor Relations for Skyworks. Mr. Gill, please go ahead.

Thank you, Operator. Good afternoon, everyone, and welcome to Skyworks' fourth fiscal quarter 2023 conference call. With me today is Liam Griffin, our Chairman, Chief Executive Officer, and President of and Chris Senesal, Chief Financial Officer for Skyworks. This call is being broadcast live over the web and can be accessed from the investor relations section of the company's website at skyworksinc.com. In addition, the company's prepared remarks will be made available on our website promptly after the conclusion during the call. Before we begin, I would like to remind everyone that our discussion will include statements relating to future results, and expectations that are or may be considered forward-looking statements. Please refer to our earnings press release and recent SEC filings, including our annual report on Form 10-K, for information on certain risks that could cause actual outcomes to differ materially and adversely from any forward-looking statements made today. Additionally, the results and guidance we will disclose include non-GAAP financial measures consistent with our past practice. Please refer to our press release within the investor relations section of our company website for a complete reconciliation to GAAP. With that, I'll turn the call over to Liam.

Thanks, Raji, and welcome, everyone. Despite macroeconomic headwinds and volatility, Skyworks executed well during the fourth fiscal quarter. We delivered revenue of $1 billion and $219 million, posted earnings per share of $2.20, and generated $366 million of operating cash flow. During fiscal 2023, free cash flow was well above $1.6 billion, which reflects our efficient business model despite a challenging macro environment. While excess supply conditions are modestly improving in the Android smart markets, we continue to undership to natural demand as the industry rebalances. Within broad markets, we see softer demand extending from consumer to certain durable sectors as customers adjust to normalize lead times and reduce excess inventory. After two years of unprecedented events due to COVID and historical supply chain shortages, the semiconductor industry is returning to a normal supply and demand balance. We are responding to these dynamics. by actively managing our inventory levels, making strategic investments in growth areas, and diversifying the reach of our business. We are well positioned to capitalize when demand inflects from a technology and roadmap, manufacturing capacity, and financial perspective. Over the medium to long term, we remain bullish on several sectors and trends. in our mobile business and our broad markets businesses. In mobile, we see opportunities to expand RF content over the coming years. On the path to 6G, we anticipate RF content increases will be driven by additional bands, enabling satellite connectivity, growing usage of uplink carrier aggregation, further adoption of 4x4 MIMO, and other innovations in RF. Switching gears to broad markets, which accounted for approximately 37% of our total revenue in fiscal 2023. We expect to benefit from three long-term secular trends. First, the proliferation of intelligent IoT connected devices on the edge. Second, the rapid transition towards electrification and advanced safety in vehicles. And third, high-speed connectivity for AI-enabled data-intensive infrastructure in cloud applications. Within IoT, we are excited about the upgrade cycle with Wi-Fi 6E and 7, driving additional content as incremental higher frequency bands drive more stringent filter requirements, including the need for BA. Wi-Fi 7 has several use cases, including 8K video streaming, immersive AR and VR, cloud gaming, industrial IoT, and telemedicine. Shifting to automotive, Skyworks is well positioned to benefit from the electrification and adoption of advanced safety in vehicles. According to internal analysis and third-party estimates, we expect RF automotive semiconductor TAM to reach $1 billion. Within automotive, we are focused on high-growth segments and content opportunities, including power isolation chips for onboard chargers, powertrains, and battery management systems in EVs, connectivity, such as cellular engines, Wi-Fi, Bluetooth, and GPS, in-vehicle infotainment systems driven by digital radios, and lastly, ADAS solutions for autonomous driving. We have the experience and ability to execute at scale with some of the leading brands in the world. In addition, we believe AI can be a catalyst for more efficient wireless communication and could fuel the need for more complex and higher performance wireless solutions. Over time, we expect high performance smartphones will be a critical platform for advanced AI capabilities, and in turn, could spark a major upgrade cycle. Furthermore, over the past two years, we've made significant investments in VAW technology and scale, which has led us for competitive differentiation. We've expanded our reach within the smartphone market, and today, nearly 50% of our mobile revenue is tied to VAW. That's more than double from the last two years. Our BAW investment has also resulted in key design wins in our broad markets business, which represents more than 10% of our business. Wi-Fi 7 is a perfect example of BAW technology being a critical requirement for the new standard. Now, turning to our quarterly business highlights, we secured 5G design wins for premium Android smartphones, including Google, Samsung, and several models in the Vox ecosystem. We accelerated design wins in Wi-Fi, including Netgear's Wi-Fi 7 mesh system, Linksys' 6E tri-band mesh router, and TP-Link's quad-band Wi-Fi 7 router. We expanded our reach in automotive segments by winning several designs for onboard chargers, battery management systems, and digital broadcast products across the leading brands. And lastly, in emerging IoT, we enabled next generation smart energy solutions with Trilliant and Samsara. In summary, Skyworks continues to deliver solid results despite a challenging macro environment. At the same time, our advanced technology and product roadmaps are aligned to long-term secular trends. further expanding and diversifying our customer base our strategic customer engagements resilient business model and experience will help us weather through this cycle's volatility with that i will turn the call over to chris for discussion of last quarter's performance in our outlook for q1 of fiscal 24. thanks liam skyworks revenue for the fourth fiscal quarter of 2023