Qorvo, Inc. (QRVO) Q2 2026 Earnings Call Transcript

Good day and welcome to the Corvo Inc. 2nd Quarter 2026 Earnings Conference Call. All participants will be in the listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you press star and then one on your touchtone phone. To withdraw your question, please press star and then two. Please note that this conference is being recorded. I would now like to turn the conference over to Doug Delito, Vice President, Investor Relations. Thank you, and over to you.

Thanks very much. Hello, everyone, and welcome to Corvo's Fiscal 2026 Second Quarter Earnings Call. This call will include forward-looking statements that involve risk factors that could cause our actual results to differ materially from management's current expectations. We encourage you to review the safe harbor statement contained in the earnings release published today, as well as the risk factors associated with our business in our annual report on Form 10-K filed with the SEC because these risk factors may affect our operations and financial results. In today's release and on today's call, we provide both GAAP and non-GAAP financial results. We provide this supplemental information to enable investors to perform additional comparisons of operating results and to analyze financial performance without the impact of certain non-cash expenses or other items that may obscure trends in our underlying performance. During our call, our comments and comparisons to income statement items will be based primarily on non-GAAP results. For a complete reconciliation of GAAP to non-GAAP financial measures, please refer to our earnings release issued earlier today, available on our Investor Relations website at ir.corvo.com under Financial Releases. Lastly, for detailed information regarding the Skyworks and Corvo combination announced on October 28th, I encourage you to review the press release, investor presentation, and related materials available on our Investor Relations website at ir.corvo.com under Events and Presentations. Today's call, however, will focus on our fiscal second quarter results as well as our outlook for the December quarter. Joining us today are Bob Rugworth, President and CEO, Grant Brown, CFO, Dave Fullwood, Senior Vice President of Sales and Marketing, and other members of Corvo's management team. And with that, I'll turn the call over to Bob.

Thanks, Doug, and welcome everyone to our call. Corvo delivered solid operating performance during our fiscal second quarter. I will cover the business strategy driving these results, as well as restructuring actions we are taking to enhance profitability and quarterly strategic achievements. After that, Grant will discuss the financials. Corvo is sharply focused on our highest performing businesses, and we regularly evaluate each of our investment areas. We have divested or exited businesses that do not meet our financial or strategic objectives, and we continue to do so. We are restructuring CSG to increase our focus on our top opportunities and improve profitability. We are narrowing our focus in ultra-wideband opportunities to automotive, industrial, and enterprise markets where customer pull for our technologies is increasing, and we are reducing our spend related to mobile and consumer applications, which are more fragmented today. We have consolidated our CSG organizational structure to reflect this increased focus. These actions, coupled with associated cuts in corporate support functions, are expected to reduce operating expenses by approximately $70 million per year in fiscal 2027. In ACG, we're driving a richer mix toward premium and flagship smartphone tiers as we reduce exposure to lower-margin mass-tier Android. Our pricing and portfolio actions are ahead of expectations, and now we anticipate lower-margin Android revenue to decline by roughly $200 million this fiscal year and by more than $200 million next year. This disciplined approach is improving ACG's profitability as we concentrate on higher-value 5G RF content for premium and flagship smartphones that demand more advanced RF performance. Within our factory network, we are also executing on cost and productivity initiatives to reduce capital intensity and structurally enhance gross margin. Our manufacturing strategy is to internally produce the most differentiated elements of our products, geographically align production with customers and suppliers, and leverage the scale, capabilities, and cost effectiveness of our outsourced partners. Over two-thirds of Corvo's production costs are external. This includes procured raw materials, wafers purchased from external foundries, as well as packaging, assembly, and test operations. Prior actions to optimize our global operations include the sale of our factories in Beijing and Dezhou, China, and the transition of our gas wafer production from North Carolina to Oregon. We are on track to close our facility in Costa Rica and transition to external partners. We have begun the process of transferring saw filter production to our Richardson, Texas, and we are on track to shut down the North Carolina facility once the transfer is complete. This positions our factory footprint strategically to manufacture gas, GAN, BOS, saw, and advanced multi-chip modules, all onshore in the United States. This is critical to DNA customers and, increasingly, a strategic differentiator to customers in other markets. Turning to our quarterly highlights, in ACG, we supported a seasonal ramp during the quarter at our largest customer. We are benefiting from strong unit volumes across existing platforms and greater than 10% year-over-year content growth on the ramping platform. We grew across each of our four primary product categories we supply to our largest customer. They include antenna tuners, high-performance filters and switches, integrated modules, and envelope tracking power management. Within the Android ecosystem, revenue declined sequentially as expected. At our largest Android customer, we supported their second-half flagship launch with a broad set of solutions. In China, ACG sales to China-based Android OEMs were approximately $65 million versus just under $100 million in the prior quarter. In HPA, we supported a broad range of mission-critical DNA applications, including land, sea, air, and space radar systems, drones, electronic warfare, missile defense, and military and commercial satellite communications. Our leading-edge beamforming technology is helping to modernize defense platforms and satellite terminals, and we are leveraging our advanced capabilities in scale and filtering in RF power to counter evolving enemy jamming capabilities. We expect double-digit year-over-year growth in defense and aerospace markets, driven by new platforms, upgrade cycles, RF content, and increases in U.S. and allied defense spending. Corvo is a strategic supplier to the U.S. government and to U.S. primes, and we enjoy broad exposure to RF content growth opportunities and critical programs, such as the proposed Golden Dome multilayer defense system. Outside the U.S., Corvo is also a beneficiary of increased EU and allied defense spending. In power management, we supported the launch of a popular smartwatch that earned media coverage for its broad set of features, including superior fast-charging capabilities. We are also a market leader in PMICs for the solid-state drive market and see increasing tailwinds in the data-send portion of our business. We are leveraging the performance advantages of our PMIC and motor control portfolio to expand content in AESA radars, drones, enterprise and AI data centers, smartphones, and wearables. In infrastructure markets, Corvo is benefiting with the industry's transition to DOCSIS 4.0, where Corvo is a leading supplier of broadband amplifiers. There also continues to be solid demand for our base station small signal devices. In CSG, we're collaborating with a large automotive tier one to scale ultra-wideband use cases, and our lead program is on track to ramp early next year. We are also supplying ultra-wideband solutions to Tier 1 equipment manufacturers for Wi-Fi 7 network access points. With ultra-wideband integrated into network access points, high-density venues can achieve ultra-precision location awareness. Locations include factories, warehouses, corporate campuses, hospitals, stadiums, and transportation centers. Key applications include indoor navigation, occupancy sensing, asset tracking, and touchless spare transactions. In addition to ultra-wideband, the content opportunity for Corvo and these access points also includes Wi-Fi front ends and filtering solutions. Wi-Fi 7 is being adopted broadly, giving its performance advantages in throughput, latency, efficiency, and network capacity, and Corvo is supporting broad adoption across routers, mesh networks, and client devices. We are also collaborating with market-leading chipset providers to support the development of Wi-Fi 8 and delivered first samples in the September quarter. Looking across our operating segments, in ACG, we're investing to expand our content opportunity with our largest customer while continuing to serve Android's premium and flagship tiers. In HPA, we're investing to grow our satellite communications, defense and aerospace, and power management businesses, and maintain leadership in infrastructure markets. In CSG, we're targeting growth and network access points and diversification in markets including automotive, enterprise, and industrial. And with that, I'll turn it over to Grant.

Thank you, Bob, and good afternoon, everyone. Corvo's fiscal second quarter revenue of $1,059,000,000, non-GAAP gross margin of 49.7%, and non-GAAP diluted earnings of $2.22 per share all compared favorably to guidance. During the quarter, our largest customer represented approximately 55% of revenue. On the balance sheet, as of quarter end, we held approximately $1.1 billion in cash and equivalents. We currently have approximately $1.5 billion of long-term debt outstanding and no near-term maturities. We ended the quarter with a net inventory balance of $605 million. This represents a sequential reduction of $33 million and a decrease of $89 million on a year-over-year basis. During the quarter, we generated operating cash flow of approximately $84 million and incurred $42 million of capital expenditures, which resulted in free cash flow of $42 million. Regarding our outlook for fiscal Q3, our guidance reflects strong execution and demand across multiple end markets. We are seeing continued momentum in HPA, offset by our exit from lower margin entry tier Android and the normal seasonal decline at our largest customer heading into December. Our expectations for the December quarter are as follows. Revenue of $985 million plus or minus $50 million, non-GAAP gross margin between 47 and 49 percent, and non-GAAP diluted EPS of $1.85 plus or minus 20 cents. Gross margin continues to improve on a year-over-year basis. Q2 non-GAAP gross margin increased approximately 270 basis points versus last fiscal year, and Q3 non-GAAP gross margin is expected to increase 150 basis points versus last fiscal year. This improvement is a direct result of multiple initiatives. We've actively managed our product portfolio and pricing strategies to reduce exposure to mass-tier Android 5G. We have positioned the company to benefit from growth in DNA, which is margin accretive given the high-mix, low-volume nature of the business. We have divested or exited margin-diluted businesses, and we continue to manage factory costs aggressively while consolidating our manufacturing. We project non-GAAP operating expenses in the December quarter to be between $255 and $260 million. The sequential decrease in OPEX reflects lower incentive-based compensation, continued OPEX discipline, and our restructuring efforts within CSG and associated corporate support functions. These actions are included in our December quarter OPEX guidance. Below the operating income line, non-operating expense is expected to be approximately $10 million, reflecting interest paid on our fixed rate debt, offset by interest income earned on our cash balances, FX gains or losses, along with other items. Our non-GAAP tax rate for fiscal 26 is expected to be approximately 15%. We continue to monitor the situation as the specific implementation of the new tax bill in the U.S., as well as changes to international tax policy, may evolve over time. We are confident the steps we are taking today across our product portfolio, business segments, manufacturing footprint positions the company to expand profitability. The benefits of these strategic initiatives will continue to become evident as we advance through fiscal 26 and into fiscal 27. Before we open the call for questions, I'd like to reiterate that the purpose of today's call is to discuss our quarterly results and outlook, and we appreciate you keeping your questions focused on these topics. At this time, please open the line for questions. Thank you.

Thank you. We will now begin the question-answer session. To ask a question, you may press star and 1 on your touch-tone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star and 2. Participants are requested to kindly restrict your questions to one per person, followed by a follow-up question. At this time, we will pause momentarily to assemble our roster. So we have the first question from the line of Carl Ackerman from BNP Paribas. Please go ahead. Thank you.

It seems like you're now assuming a $200 million headwind from exiting the low end of the China Android market. I think that's a bit more than you previously envisioned of $150 to $200 million. Could you address why that is the case for this year and next year and if there's anything else that's happening with respect to the mid-tier market or if it's just something else.

Hey, Carl. This is Dave. I can answer that one. Yeah, so the $200 million decline that Bob mentioned is going to be more weighted towards the back half of the year and even more so in March for a couple reasons. so if you recall last time we said we gained content in our largest Android customer in their second half flagship so we'll be on the will be on the other side of that and get into March and we also mentioned that we would have lower content this year on their their first half flagship brand next year so those two are factors but the bigger factor is really just the timing of those mass tier models that we continue to support as we made this pivot in our Android business, those are now ramping down and we're not obviously replacing them with new designs heading into next year. So that's probably the bigger impact that you're seeing is driving that.

Got it. Thanks for that. For my follow-up, how would you rank order the December quarter outlook across HPA, CSG, and ACG. I appreciate some of the initial commentary you gave with respect to the decline of Android and seasonal decline of Apple. But I guess as we look out into HPA from December quarter and into next year, just click on that and see if that, in fact, will be the best-performing segment for December next year. Thank you.

Sure, Carl. Let me take a stab at it, and then Philip can jump in. Over the course of the year, we do expect our DNA business to continue to increase quarter over quarter, just given the seasonal nature of customer order patterns there, and we're still expecting that to be the case. We had some very strong growth in that business. On a year-over-year basis, it was over 25%. HPA was up 25% on a year-over-year basis in the last quarter, and we feel very strong strongly that that's a very high-performing area from a growth perspective.

Yeah, I would add, so outside of DNA, we're also seeing quite a bit of strength in our infrastructure business. In our broadband business, as we've talked about, you know, Doctus4.0 continues to roll out. Really, really strong ramp that we see, you know, continuing throughout this year and into next year as well. And then on our base station business, you know, kind of our core base station business that goes into kind of the radios and stuff, that that's doing well. But we're really seeing a proliferation of those products into some new markets that we're excited about. The first is drones. Both two-way and one-way drones are using both 4G and 5G products as one of their communication paths. So we're seeing strength this year, this quarter, next quarter, and into next year for that. And then also, if you think about it, as you look at these direct-to-cell satellites, really they're base stations in the sky. And so we're seeing the same products that we use going here, terrestrial going up into space into these applications. So we expect that to continue, and that's why we're pretty optimistic about double-digit growth going into next year as well.

Thank you.

Thank you. We have the next question from the line of Chris Casso from Wolf Research. Please go ahead. Yes, thanks.

I guess the first question is in light of some of what you're saying about some of the Android decline, the way it serves the March quarter. What should we think with regard to March quarter seasonality? What do you consider normal seasonality to be? and what are the factors that we should consider when comparing to normal seasonality this year?

Sure. Hey, Chris. This is Grant. Let me take that one. We're not guiding Q4 or the full year at this time, but we're encouraged by the strength that we saw in the first half, but we're mindful of the typical seasonality, as you mentioned, in the back half, where we see our largest customer ramping down typically in the March and June periods, and then as we pivot away from some of the lower-margin Android business, you know, as Dave pointed out earlier, be especially impactful in fiscal Q4. Now, that said, you know, we are executing on our strategy to focus on driving meaningful productivity improvements. And so, you know, from our standpoint, we're executing that strategy. We're focusing on the premium flagship tiers. And this is something you're starting to see in our gross margin profile. I mean, we committed to hitting, you know, high 40s, and we're doing just that. And we, you know, getting very close to 50 points of gross margin in a seasonally strong quarters. So, you know, we are hard at work executing on profitability and executing to our strategy to pivot away from Android. Low-tier Android, excuse me.

Right. Well, you mentioned gross margins, and that was going to be my follow-up. And there's a lot of moving parts as we go into next year. You know, there's still some things you're doing with the factories in order to drive efficiency, but you said that I imagine the mix gets better as you exit some of the low-tier Android. So how does that result in gross margins? What are the puts and takes we should think about for gross margins next year?

I'm sorry, you're breaking up. Can you repeat the end of your question?

Oh, just in terms of what we should expect, the puts and takes on gross margins for next year.

Sure. So the business mix is one of them. It'll be meaningfully helpful for us as we see HPA and Defense Aerospace and other areas grow as a percentage of our total top line, that's very impactful. And then product mix within the segments, especially ACG, where we have already communicated our exit from the low-tier Android area, so the premium and flagship products there, in terms of that portfolio, will be helping from a mix standpoint. And then the factory actions that we're executing on, bringing more volume to our other locations, also helps significantly. We've talked through Costa Rica, and the closure there is on track. The transfer of our saw capacity from Greensboro to Texas is also on track, and we would expect that to be beyond fiscal 27. And I think all the other cost reduction efforts that we're doing, the standard blocking and tackling, yield improvements, cost downs, and all the other things are more standard activities, all on target.

Thank you.

Thank you. We have the next question from the line of Harsh Kumar from Piper Sandler. Please go ahead.

Yeah, hey, guys. First of all, really good results. Maybe, Grant, one for you. In your guidance, I'm looking at your margins versus what you just delivered for the September quarter, and I would have thought that your margins wouldn't be down quite the way that you're guiding to. So I guess I'm curious if it's just revenues that are driving this, or is there other factors in play? Because you've got a lot of positives going on in the margin structure as well that fundamentally that you're driving to. So just want to understand the factors driving the margin for the December quarter guidance.

Sure. You know, it's generally the case that as we're ramping down and, you know, as we start to see that happen in the December quarter as we head into March, you know, the utilization tends to lead the revenue there. So we're seeing some of that. It's not atypical. I would say that the margin performance is still substantially improved on a year-over-year basis, and so even on the revenue basis that we've been guiding to, you can see that impact. So my view is it's strong improvement, and we'd expect that to continue as we move through fiscal 26 and into 27.

I wouldn't read anything too meaningful into any of the subtle variation from a quarter-to-quarter basis other than generally the mix. okay um and then maybe one for bob bob um on aerospace and defense you've got some pretty good pretty large goals but you're also doing really well we know the market's healthy so maybe help us understand two things one what is the scale right now like how big is this business right now you mentioned it's up 25 year on year but but just in absolute dollars if you can and then specifically right now what kind of technologies or end applications are working for core world to drive that revenue growth.

Thanks, Harsh. And it's hard for me to contain Philip when it comes to this. So I'm just going to let him go ahead and talk and find out a little color. But I appreciate the question on the defense business. As you said, it's doing fantastic, and they're producing great products and really doing an extremely good job. Philip?

So, Harsh, I would say that we've sized it publicly before. So I would say, you know, kind of mid-400, and growing. I think we had commented in our last call that we had, and it is continuing to grow. It actually grew another $2 billion in the funnel over this quarter alone. Really, where we're seeing the applications, they're pretty broad-based, and so it's maybe a long answer to your question, but I'll try to kind of hit some of the highlights. So one of the areas that we're really seeing is, is the U.S. is looking at how do you build new capabilities both in drones, which require a lot of different kind of technologies, both radar and comms. So there's a whole lot of more and better RF that's needed to scale that up. The other area is in electronic warfare, where we're looking to come up with new ways to drive spectrum dominance in that area. And in electronic warfare, one area that is really growing rapidly is the use of solid-state PAs to be able to do more direct energy-type defensive and offensive applications. That is a sweet spot for our technology. And so just a tremendous amount of opportunity there. But in addition to that, I would say, you know, in our core markets, Whether, you know, I would say core markets in defense and aerospace is really, you know, the radar-based platform. Whether that's land, sea, air, we are seeing a whole new set of capability needs that are what the U.S. government calls, you know, an urgent need. And it really fits into the sweet spot of what we do. And then you layer on top of that, if you look at Golden Dome and what they're trying to do in any kind of missile defense system, you're going to need land-based assets, you're going to need air-based assets, you're going to need space-based assets. All of those platforms that they're looking at, we are in those platforms. And so that will be a tailwind for us as well. So it's really broad-based. I can't just pick one that is driving it. But, you know, we're seeing a lot of tailwinds, and especially because I think I would add, you know, as the administration has really laying, starting to become very clear on what their, you know, what their priorities are, and those priorities really do fit with what we're doing. And that doesn't even include what's happening on the NATO side in Europe, as they increase their defense budgets up to 3.5% of GDP. So, again, lots of positive things that are happening. Thank you so much.

Thank you. We have the next question, the line of Christopher Rowland from Saskana. Please go ahead.

Thanks so much for the question. I guess as we think about 27, are we still thinking about like mid-single digit? Are we thinking about growth overall for ACG? And then additionally, you know, you have talked increasingly about integrated modules. Would love an update there on your capabilities, your differentiation, and the likelihood you think you get some new sockets here. That'd be great.

Yeah, sure, Chris. Let me take the first part and then Frank can jump in. And, you know, obviously really excited about, you know, our technology, but it's too early to comment on fiscal 27 at this point. So, you know, we won't be making any commentary there at this point in the game, but we'll have more to talk about probably as the year advances. I'll let Frank comment on integrated modules.

Hey, Chris, similar feedback with respect to things that are our discussed. We're too early to say at this time. We're working very hard on product development, not just for next year, but for the next three years. I do want to say I'm really proud of the ACG team and all the work they're doing. Great.

Thanks for that. And then as we talk about the merger, are there still any opportunities? Would you consider any merger opportunities, even tuck-ins, any acquisitions from that standpoint, any divestitures, any buybacks, any OPEX changes, or any like footprint consolidation beyond what you've already announced? Or should we just kind of thank steady state Cuervo until all the approvals and the merger is done?

I appreciate the question. And I think what's most important is we also have to keep in mind that, you know, we are going to be running separate and independent companies. So, you know, there is latitude in our agreements for us to make changes and do things that we want to be able to do. But you've got to remember, we're running these as separate companies.

Yep. Okay. I think that answers it.

Thank you. We have the next question from the line of Chris Sankar from Covenant Company. Please go ahead.

Yeah, thanks for taking my question. I have two of them on mobile. First one, Bob, can you give an update on your progress is your biggest customer on the mid-to-high band pad. It seems like that's a big opportunity. Is there any way to figure out how that's progressing and when we should start seeing some results or any timeline for that? I want to follow up.

I appreciate the question, and you can imagine that's a topic that we just can't cover and comment about where we're at. I think Frank's already said how proud he is on the team and how well they're executing, but time will tell, and patience, please.

Fair enough, fair enough. And then a follow-up, you know, post exiting the lower tier Android, how should we think about your Android and China exposure? Are you still chasing 15 to 20% of the Android market today? How do you think about how it splits between China and your big non-China Android customer? And I think you kind of commented a little bit on March quarter. I'm just wondering, besides the lower tier Android in March and seasonality, are there any idiosyncratic things you had to worry about in March quarter? Thank you.

Jerry, we still feel very strongly about our strategy to pursue the premium and flagship tiers of Android, right? They're going to have a product portfolio and they're going to compete against other devices in that segment. They're going to need to use premium-performing parts, and that's where the majority of the TAM and SAM is for us in the ACG side. You know, we feel very well positioned. We're going to continue to support our Android customers, and, you know, we've been very successful at exiting some of the less attractive areas there, as Bob commented on in his prepared remarks. It's a little bit difficult to comment on share specific to one quarter given the ramp timing of all the different models in the Android ecosystem.

Got it. Thank you.

Thank you. We have the next question from the line of Jim Snyder from Goldman Sachs.

Good evening. Thanks for taking my question. On the HPA business, I'm wondering if you're seeing any kind of cyclical effects outside of the normal kind of secular growth in those product lines. And, you know, what are your customers telling you in terms of, you know, inventory levels, willingness to restock, or anything else from a sort of a supply chain or a single point of view? Thank you.

This is Philip. I would say channel inventory is healthy. You know, we're not seeing any kind of unusual order patterns. I would say, you know, more on the set, you know, we're starting to get requests for, hey, we need, you know, delivery sooner rather than.

All right, we're back.

So the question, I think, was around HPA and channel inventory. What I was saying was we don't see any kind of excessive channel inventory. In fact, we see more, you know, kind of expedite asks than we do, you know, channel or push outs or anything like that. So I'd say the channel is healthy. One area I would also maybe highlight is we are seeing really strong bookings and backlog in our power management business surrounded around the data center side for solid state drives. So that would be one area where I also don't see any inventory challenges, but we're seeing expedite requests.

That's helpful. Thanks. And maybe as a quick follow-up, as a housekeeping question, maybe color on your guidance by segment or expectations heading into the December quarter.

Yeah, thanks for the question. We don't guide by segment.

We have the next question from the line of Edward Schneider from Chart Equity Research. Please go ahead.

Thanks a lot. Hey, guys, just a couple of housekeeping questions. Were there any underutilization charges, especially regarding Oregon, and what you're feeling on those? for um obviously if you're going to be seasonally down in the next you know a couple quarters because your largest customers you're probably going to be burdened more so just as a starting point can we can we get color on that yeah hey ed this is grant so no period related charges associated with under utilization it's just the the normal uh loadings or generating factory variances within the normal bands and that applies to you know product costing but but nothing from a period charge perspective that would create an abnormal utilization charge okay and then And I'm just trying to get a feel for how much capacity you have both in gas in Oregon and then Baw in Texas. I know you haven't been notified yet on anything that would occur next week, next year it's your largest customer. And I know it depends on share if you do win, et cetera, but I'm just trying to get a feel for what kind of capex you might be facing, if any, especially with regard to gas, because most of your product wins aren't really gas intensive. You've got a lot of tuners, you've got less SOI, et cetera. So I'm just trying to get a feel for where you sit in capacity and gas in ball.

Yeah, thanks for the question, Ed. I think first I want to say the team's done a fantastic job in both gas as well as in the filters, ball filters in particular, in shrinking sizes. So as we ramp new technologies, typically we're reducing the size so we don't have to add a lot of capacity to meet the same demand. So the team's done a fantastic job there. And I think as we look at the outlook for next year, we do expect, you know, we'll spend money for expanding capacities and bring in new technologies. But I think it's going to be less than what we spent this year. But, again, I think people underestimate the tremendous work the team has done in reducing die sizes as we've released new process technologies. So I think we're in good shape to support a lot of business.

Maybe, Ed, I would just further Bob's comments. And obviously, you know, I mean, in order to compete for business, you have to have an ample amount of capacity in place in advance. So, you know, we wouldn't be targeting business we don't think we could support with our existing capacity.

And then we also have the ramp down of the Android business as well, which frees up capacity. So we're in a pretty good place.

Very good. That's what I was looking for.

Thank you. We have the next question from the line of Peter Peng from JP Morgan.

Please go ahead. hey guys thanks for taking my question um just on the content growth of about 10 plus for the last you know for the most recent generation you mentioned that all of your four major products grew on a content wise year over year maybe if you can just give us the sense of um contribution from you know these product groups thank you thanks for the question we haven't actually commented i mean on each of the four different categories of revenue at our largest customer and which was contributing to the growth other than to say that you know we're seeing growth in all categories okay and then for my follow-up I think last quarter you guys

talked about the CSG you know being able to grow low single digits just given some of the restructuring initiatives what's the current expectation for this business group sure so CSG as we commented last quarter had experienced the push out of a large award in our ultra wide band business, you know, and that is still the case. There's no change there. You know, in terms of growth, you know, there'll be some impact, but relatively marginal due to the restructuring activities, you know, so you could see a roughly flat perhaps a year for CSD plus or minus.

Thank you, guys.

Thank you. This concludes the question-and-answer session. I would like to turn the conference back over to the management for any closing remarks.

I want to thank everyone for joining us tonight and hope everyone has a great evening.

Thank you. This conference has now concluded. Thank you for attending today's presentation. You may now disconnect.