Qorvo Inc at Barclays Global Technology Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Thomas O'Malley - Barclays - Analyst : So I think a good way to start is maybe with a state of the full business. So, Grant, could you walk us through what's going on with the ACG business, the CSG, and Philip, maybe with HPA. You guys can mix it up. Whoever wants to go first can start.

Question: Thomas O'Malley - Barclays - Analyst : Perfect. Well, I'm going to pass this over. We're all now mic-ed up here, so I'll keep it going. But now that we're at the year-end, at least from the calendar year-end, we can look back and talk about kind of content at the largest customers for this year and then maybe your outlook in the calendar year '25. So could you level set us, where did we end, and then looking out into next year, where could we go?

Question: Thomas O'Malley - Barclays - Analyst : So I'll speak to the financial question. So on last earnings, you mentioned Android mix shift and utilization as gross margin headwinds in the December and the March quarters. Is there any updated visibility there? And what are the important levers for gross margin improvement to your target for the investment, which is 50% plus as we go into fiscal year '26?

Question: Thomas O'Malley - Barclays - Analyst : Very, very helpful. So just to synthesize there, $100 million that's across both spend and COGS. And in terms of where that's located across the business, you're going to give more detail, obviously, on the earnings call. But any color -- is that in relation to the Android business that you were talking about as well? So any color there would be super helpful.

Question: Thomas O'Malley - Barclays - Analyst : And then in terms of the timing is the last question on it. And just how quickly can that occur? Is that over the course of several quarters? Is that all going to come out at once? Anything on the cadence?

Question: Thomas O'Malley - Barclays - Analyst : Okay. Super helpful.

Question: Thomas O'Malley - Barclays - Analyst : Super helpful. So I guess I think the perfect kind of segue is, so Android as a market seems somewhat structurally challenged. There's clearly a market dynamic that's occurring, that's having you shift priorities from a spend perspective elsewhere. Where, as a company, are you doubling down your efforts in the total business? Where is your areas of growth? And do you feel like this is a time where you potentially would need to add to that growth profile? Or can you do it from an organic perspective? Maybe two different questions. Where organically are you focused? And then is there any areas where you would feel that you want to bolster the portfolio?

Question: Thomas O'Malley - Barclays - Analyst : That's a great explanation and overview. I want to touch on CSG as well. But just to dot my Is and cross my Ts here. So you had the asset sale this week, maybe talk a little bit about that. And then now we have moving parts. You have $100 million coming out of the COGS and the spend. You have a little bit lighter Android, it sounds like. And then you have the sale, which you, I believe, said closed in Q1. So all of those moving parts, anything changing? I think you would have said out front in terms of the profitability in the December quarter. It seems like you're still within the range or you would identify that. And then how does that translate into March to the best of your abilities? I know you're just going to update us a little bit more on the earnings call, but -- REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 12, 2024 / 5:50PM, QRVO.OQ - Qorvo Inc at Barclays Global Technology Conference

Question: Thomas O'Malley - Barclays - Analyst : Super helpful. And then on the asset sale, I think that you went out of your way on the earnings call to identify that as an area that you would potentially be open to a sale. What occurred? And why did you feel that asset had a better home elsewhere?

Question: Thomas O'Malley - Barclays - Analyst : Super helpful. All right. Let's pivot to CSG. So I think you talked about the two sequential quarters here, down in December and then grow sequentially in March. A lot of moving pieces in that bucket as well. Maybe talk through the puts and takes about why you're seeing that trend. And then specifically to the commentary on the full year and opportunities there, where are you seeing kind of '25 growth drivers?

Question: Thomas O'Malley - Barclays - Analyst : Super helpful. In terms of manufacturing differences between HPA and CSG, could you call out anything from a semiconductor perspective that differs? If you talk about various locations for those productions, what are those customer sets expect? And then just as a follow-up, what does it mean to be a US-trusted foundry? I think that that's something that gets brought up a lot, but I don't think people fully understand. And you talked about electronic warfare specifically. As you look at what it means to supply some of these larger contracts, what does being a US-trusted foundry get you that others may not have?

Question: Thomas O'Malley - Barclays - Analyst : Very nice. Just broadly speaking, I just wanted to touch on ACG just really quickly. So I think in the preamble, you talked about your ET portfolio and how that -- if I remember, historically, when Intel was internal, you guys would always see a content bump there. Outside of that ET portfolio, where are areas at the large customers, or a large customer that you can't talk super specifically, that you can also see content increases outside? Because I think the obvious assumption is, hey, if you move to an internal modem, you're going to get ET increase, that could help with content. But elsewhere, you've seen some product reuse. You guys, you have not seen as much of that. But where can you see content increases? Is it really just ASP uplift in your existing sockets? Or is there any room for expansion outside of the ET side?

Question: Thomas O'Malley - Barclays - Analyst : And more specifically, in the Pro models, I think that Doug and I used to joke about this all the time, the chips you can't see during your teardown. Specifically speaking, where are you seeing more of that content? Can you be specific as to what you're getting more of in that Pro model? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 12, 2024 / 5:50PM, QRVO.OQ - Qorvo Inc at Barclays Global Technology Conference

Question: Thomas O'Malley - Barclays - Analyst : Absolutely. I didn't think that we'd go ACG last, but I appreciate all the color. Thank you all for being on stage. Thank you for the update and look forward to a great '25.