Skyworks Solutions, Inc.

Welcome to Skyworks Solutions first quarter fiscal year 2024 earnings call. This call is being recorded. At this time, I will turn the call over to Rajeev Gill, Vice President of Investor Relations for Skyworks. Mr. Gill, please go ahead.

Thank you, operator. Good afternoon, everyone, and welcome to Skyworks first fiscal quarter 2024 conference call. With me today is Liam Griffin, our Chairman, Chief Executive Officer and President, 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 their 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 discuss 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 complete reconciliation to GAAP. With that, I'll turn the call over to Liam.

Thanks, Raji, and welcome, everyone. Skyworks continued to execute well during the first fiscal quarter of 2024, despite a volatile macroeconomic environment. We delivered revenue of $1.202 billion We posted earnings per share of $1.97 and generated $775 million of operating cash flow. Free cash flow was also a record at $753 million, or 63% free cash flow margin, which reflects strong working capital management and moderating CapEx intensity. Let's review both near and long-term secular trends in our end markets. After two challenging years across Android ecosystems, we see signs that the industry is stabilizing. Excess supply conditions are abating, and inventory levels in the distribution channel and at the OEM level are normalizing. Customers are starting to restock inventory, albeit gradually, as supply and demand dynamics improve and new phones are introduced into the market. Moreover, we've made strategic investments in product development, positioning us to compete for design wins and share gains, focusing on highly integrated platforms for the leading mobile OEMs. We are pleased with our competitive positioning and technology roadmap and are poised to return to growth when the markets recover. Within broad markets, we see cross currents, but many factors are moving in the right direction. In consumer IoT, we believe that we are past the bottom as inventory levels in the channel have normalized and demand signals are improving. Furthermore, we are executing on the upgrade cycle to Wi-Fi 6E and 7. We see significant design wind momentum across our retail, carrier, and enterprise channels. These systems carry substantially higher dollar content. because of the addition of the new six gigahertz band and the inclusion of BOSS filtering technology. We expect wireless infrastructure and traditional data center will remain a headwind throughout 2024 as OEMs continue to digest excess inventory. Despite this, we remain bullish on several new product cycles, including major design wins in ethernet for high bandwidth networks, and 400 gig and 800 gig optical module upgrades. Lastly, automotive and industrial markets are experiencing a near-term inventory correction. However, we see opportunities for growth in our automotive business driven by higher adoption rates of connectivity in the vehicle, along with growing EV penetration, driving demand for our power isolation products. Taken together, we anticipate December quarter represents the bottom in the broad markets business. There are several long-term secular growth dynamics that leverage our differentiated technology, including the proliferation of intelligent edge-connected IoT devices, automotive electrification and advanced safety systems, and AI-enabled workloads, driving cloud and data center upgrades. Each of these trends require intricate connectivity engines, underlying the need for speed, ultra-reliable, low-latency performance. In addition, 5G technology is expanding beyond the smartphone into more use cases in broad markets, including private cellular networks in factories and stadiums, customer premise equipment supporting Verizon and T-Mobile, and multiband automotive telematics. and wearables, to name a few. We also remain bullish on the long-term RF content story in smartphones. Coupled with growing 5G penetration, we see increasing levels of complexity in content with each new generation. For example, 5G Advanced is driving higher RF content, including the addition of satellite bands, 4x4 MIMO on the downlink and uplink, higher bandwidth, more carrier aggregation, upgrades to Wi-Fi and GPS, and other innovations. Lastly, we are energized about the prospect of generative AI migrating to the smartphone, sparking a potential major upgrade cycle. As the performance bar rises every year to support AI-enabled phones, the complexity requirements of RF will continue to increase driving the need for more integration, lower power consumption, smaller footprint, and spectral efficiency. 5G is the ideal standard for on-device AI applications as it takes advantage of lower latency, faster transmission speeds, and higher frequency ranges. In addition, AI-enabled workloads are driving demand for high-speed connectivity for data-intensive infrastructure and cloud upgrades. accelerating the demand for our high-precision timing products. Turning to our quarterly business highlights, we secured several design wins in infrastructure, including optical transport products with a major operator in India, and timing devices for 5G small cells for private networks. We expanded the Wi-Fi design pipeline with Cisco's enterprise access points Linksys tri-band mesh router, and TP-Linx tri-band gaming router. We increased design wind momentum in automotive, including telematics, infotainment systems, and onboard chargers across the leading OEMs. Lastly, in emerging IoT, we delivered next-generation smart energy solutions with Google's Nest temperature sensors and ITRON's residential gas meters. In summary, Skyworks delivered solid financial results despite a challenging macro environment. Our strong balance sheet, record cash flow, and profitability reflect our resilient business model, diverse customer base, and technology scale. With that, I will turn the call over to Chris for discussion of last quarter's performance and our outlook for Q2 of fiscal 2024. Thanks, Liam.