Skyworks Solutions, Inc.

Good day and welcome to the SkyWorks third quarter fiscal year 2025 earnings call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. Instructions will be given at that time. As a reminder, this call may be recorded. I would like to turn the call over to Raji Gill, Vice President, REST Relations and Corporate Development. Please go ahead.

Thank you, Operator. Good afternoon, everyone, and welcome to Skyworks' third fiscal quarter 2025 conference call. With me today for our prepared remarks is Phil Brace, our Chief Executive Officer and President, and Rob Streisheim, Interim Chief Financial Officer for Skyworks. This call is being broadcast 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, today's discussion will 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 Phil.

Thanks, Raji, and welcome, everyone. Skyworks delivered strong results this quarter, fueled by an upside in mobile and sustained strength across broad markets. We posted revenue of $965 million, delivered earnings per share of $1.33, and generated free cash flow of $253 million. Revenue, gross margin, and EPS exceeded the high end of our guidance. We returned $430 million to shareholders this quarter through share repurchases and dividends, and more than a billion dollars across the past two quarters, supported by strong free cash flow and disciplined working capital management. In mobile, revenue came in above seasonal trends, with strength continuing into the September quarter, supported by healthy sell-through at our top customer and new product launches in Android. While in-demand signals remain solid, we're actively monitoring the channel and are maintaining a disciplined approach to inventory. Looking ahead, we see multiple drivers of long-term RF content growth, including opportunities from internal mode of adoption higher RF complexity with AI features, and a larger addressable footprint within the smartphone. At the same time, we'll continue to deliver more performance in smaller form factors, enabling richer features within current sockets. Smartphone replacement cycles remain historically long, now averaging over four years, even as our top customer maintains a record installed base. The first wave of AI-capable phones is reaching scale, and early demand signals are encouraging. As AI capabilities become more intuitive and integrated, we believe this could drive an inflection in upgrade cycles, leading to a potential tailwind to volumes and content over time. Our deep RF expertise, strong customer relationships, and advanced manufacturing put us in a strong position to lead through this next phase. Broad markets continue to gain momentum, driven by new customer engagements across edge, IoT, and automotive. we are seeing stronger order flow, healthy book-to-bill levels, and lean channel inventory. In Edge IoT, Wi-Fi 7 adoption is accelerating across consumer, enterprise, and industrial applications. These systems demand faster speeds at ultra-low latency, translating to greater RF complexity. Looking ahead, we're already investing in Wi-Fi 8 to support the next wave of performance. Automotive remains a key growth driver for Skyworks, supported by long design cycles that offer greater visibility and more durable revenue streams. We broadened our reach across a growing roster of global OEMs, securing programs with BYD, Ford, Geely, Nissan, and others. As vehicles become more software-defined and connected, the need for secure wireless links continues to grow, from 5G telematics to over-the-air updates and infotainment, all of which increase our content opportunity. In traditional data center and infrastructure, business activity is rebounding as inventory normalizes. Meanwhile, accelerating AI workloads are driving upgrades to 800 gig and 1.6 terabyte switches, increasing demand for our precision timing solutions. Altogether, BroadMarkets is becoming a stronger, more resilient growth engine for Skyworks, and we expect this momentum to continue with both sequential and year-over-year growth in the September quarter. In aggregate, this is a $1.5 billion business with a double-digit long-term growth profile and gross margins above the corporate average, a core part of our portfolio that we believe remains underappreciated relative to its scale and contribution. Today, we're taking action to optimize our manufacturing footprint with the planned closure of our Woburn manufacturing facility and the consolidation of operations into our Newberry Park site. This move is designed to drive higher FAB utilization, lower fixed costs, and improve overall efficiency in the future. As our product mix shifts towards more advanced higher value content, this consolidation positions us to expand gross margins over time while reinvesting in next generation technologies and maintaining the scale and technical capability required to serve our premium customers at the highest levels. Before we dive into the numbers, I want to welcome Rob Shresheim to the team in his role as interim CFO. Rob has served on the Skyworks board for nearly 20 years and knows our business strategy and leadership team exceptionally well. His appointment ensures continuity as we move through this transition. On the CFO search, we've been taking a deliberate approach and have a number of strong candidates in the pipeline. I expect the process to conclude shortly. With that, I'll turn the call over to Rob for a discussion of last quarter's performance and outlook for Q4 of fiscal 25.