Skyworks Solutions, Inc. Q3 FY2025 earnings call

• Skyworks delivered strong results with revenue of $965 million, EPS of $1.33, and free cash flow of $253 million, exceeding guidance. - Mobile revenue was up above seasonal trends with strength continuing into the September quarter, supported by healthy sell-through and new product launches in Android. - Broad Markets continued to gain momentum with growth in edge IoT, automotive, etc., for six consecutive quarters. - Planned closure of the Woburn manufacturing facility to consolidate operations into Newbury Park to drive higher fab utilization, lower fixed costs, and improve efficiency for margin expansion. - Returned $430 million to shareholders during the quarter through share repurchases and dividends, with over $1 billion returned in the past two quarters.

Skyworks posted revenue of $965 million. Mobile represented 62% of total revenue, up 1% sequentially and 8% year-over-year, driven by stronger sell-through at the top customer and new product launches in Android. Broad Markets, including edge IoT, automotive, industrial, infrastructure and cloud, grew 2% sequentially and 5% year-over-year, marking the sixth consecutive quarter of growth. Mobile revenue was approximately $598.3 million (62% of $965M), and Broad Markets revenue was approximately $366.7 million (38% of $965M). Gross margin was 47.1%, driven by product mix and cost discipline.

• Q4 2025 revenue expected to range between $1 billion to $1.03 billion. - Mobile anticipated mid-single-digit sequential growth. - Broad Markets set to grow again with year-over-year trends accelerating. - Gross margin projected to be approximately 47%, plus or minus 50 basis points. - Operating expenses expected between $235 million and $245 million, including ~$7 million incremental expenses from the 14th week in the September quarter. - Anticipated diluted EPS at midpoint of revenue outlook is $1.40.

• Monitoring channel and inventory in Mobile despite solid end demand. - Competitive pricing environment in the RF market. - Dependence on a single large customer, which accounted for about 63% of revenue in the quarter.

Q: Within the handset business, anything changed in the last 90 days?

A: Strong demand, with the largest customer having strong demand and shipments benefiting mix.

Q: Impact of the extra week in the September quarter on the December quarter?

A: Not guiding beyond the current quarter, focused on execution.

Q: How does the mix of internal vs external modem affect Skyworks' content?

A: More content available on internal modem, natural tailwind if shift occurs.

Q: Android revenue comparison between June and current quarter?

A: Android revenue in June quarter was up significantly, expecting continued growth into September quarter.

Q: Importance of diversification beyond handset?

A: Focus on gross margin accretive, sticky, longer revenue constant opportunities to balance handset volatility.

Q: Economics of closing Woburn facility?

A: Long term tailwind in factory utilization, CapEx reduction, OpEx improvement, but specific numbers not broken out yet.

Q: Content visibility in flagship phones into next year?

A: Visibility depends on late fall down-selection, encouraged by RF content growth drivers.

Q: Pricing environment and bidding for new sockets?

A: Competitive environment, focus on delivering best part at best price, encouraged by long-term content drivers.

Q: Is this year the low point in content at largest customer?

A: Laser-focused on changing trajectory from downward to upward sloping.

Q: Timing and impact of closing Woburn facility?

A: Transition of products to Newbury Park will take time, long term benefits in utilization and margin.

Q: Size of auto business and growth potential?

A: Auto business is ~$60M per quarter, growing significantly with long design cycles.

Q: Visibility in Mobile and OpEx into next year?

A: Visibility strong across board, OpEx disciplined with targeted R&D investment.

Q: Infrastructure networking cloud subsegment performance?

A: Inventory overhang behind, demand signals positive, aligned with consumption.

Q: Apple Broad Markets piece performance?

A: Broad Markets at similar percentage of sales as previous quarters.