Good afternoon and welcome to Skyworks Solutions Second Quarter Fiscal Year 2025 Earnings Call. This call is being recorded. At this time, I will turn the call over to Raji Gill, Vice President of Investor Relations and Corporate Development for Skyworks. Mr. Gill, please go ahead.

Thank you, operator. Good afternoon, everyone and welcome to Skyworks second fiscal quarter 2025 conference call. With me today for our prepared remarks is Phil Brace, our Chief Executive Officer and President, and Kris Sennesael, 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 complete reconciliation to GAAP. With that, I'll turn the call over to Phil.

Thanks, Raji, and welcome everyone. I'm excited to join you today for my first earnings call as CEO of Skyworks. Over the past few months, I've engaged with our customers, partners, employees, and shareholders, and I'm energized by the opportunities ahead. Since stepping into the role, I spent time getting to know our teams across the company and I've been incredibly impressed by the depth of talent and expertise throughout the organization. We have some of the smartest engineers I've ever worked with, and there's a real energy and passion for innovation that you can feel everywhere. There's also a competitive edge and a hunger to win. It's been exciting to jump in and be part of such a strong and capable team. Skyworks sits at the center of the wireless revolution, backed by a rich history in RF innovation. Our proprietary technologies power some of the most demanding connectivity platforms in the world, from 5G and WiFi to automotive and edge IoT, and we're continuing to push the bounds of what's possible. Now let's review our fiscal Q2 results. Skyworks delivered solid performance driven by our diversified portfolio and disciplined execution. We posted revenue of $953 million, delivered earnings per share of $1.24 and generated free cash flow of $371 million. Revenue, gross margin and EPS exceeded the midpoint of our guidance. We returned a record $600 million to shareholders through share repurchases and dividend payments, the highest amount ever. This underscores our confidence in the long-term outlook as well as our commitment to delivering value to shareholders. Let's provide some additional color on the business. In mobile, we experienced typical seasonal patterns during the March quarter while executing on multiple new product launches with our leading mobile customers. Smartphones are evolving with AI driving more uplink-intensive workloads like real-time voice processing and enhanced imaging. Over time, this trend should drive higher transmit power, better efficiency and expanded uplink MIMO areas where Skyworks is strongly positioned. In our diversified businesses, we've seen a steady recovery underway for more than a year with five consecutive quarters of sequential revenue growth and two quarters of positive year-over-year comparisons. This improvement is being driven by strength in Automotive, Edge IoT, and Wi-Fi 7 adoption across consumer and enterprise devices. Demand signals are firming, bookings are improving and in most segments, we're seeing inventory normalization across the distribution channel. In Edge IoT, Wi-Fi 7 adoption is accelerating to meet real-time demands like high-resolution video and smart sensors. Its advanced capabilities are driving greater RF content per system, creating strong momentum for our connectivity portfolio. In addition, we've already begun early development on Wi-Fi 8 to solidify our technology leadership in next-generation wireless connectivity. In automotive, the move to software-defined vehicles is driving the need for robust wireless connectivity as these vehicles rely on over-the-air updates, real-time sensor data processing, and interconnectivity between vehicle systems. The RF content should also scale up. Lastly, as AI drives more complex data center workloads, the need for tighter integration between timing devices and processors is growing. While still early, we see a long-term opportunity to capitalize on this trend with our precision timing portfolio. Overall, we're encouraged by the momentum in our diversified businesses. Our position in next-generation product cycles from automotive connectivity to edge IoT to timing reinforces our long-term trajectory. Turning to our quarterly business highlights, we secured design wins across 5G premium Android smartphones and for in-vehicle infotainment systems with major OEMs. We also expanded Wi-Fi 7 across enterprise access points, routers, and home mesh networks. Before I turn the call over to Kris for a discussion of last quarter's performance and outlook for Q3 of fiscal '25, I would like to highlight some changes to the executive leadership team. First, Mark Dentinger will be succeeding Kris as the CFO of Skyworks, effective June 2, 2025. Mark brings significant CFO-level and strategic experience across the technology sector. His deep expertise and proven track record make him a strong addition to the Skyworks leadership team. Kris will be stepping down to pursue another professional opportunity. On behalf of the entire board and everyone at Skyworks, I would like to thank him for his valuable contributions and wish him success in his new endeavors. Second, Todd Lepinski will be succeeding Carlos Bori as Skyworks Senior Vice President, Sales and Marketing, effective June 2, 2025. Todd brings experience driving global revenue growth and building high-performance teams in the semiconductor and technology sectors. Carlos will be shifting to an advisory role to help ensure a smooth transition. I'm looking forward to partnering with Mark and Todd and leveraging their strong leadership capabilities as we execute on our long-term strategic initiatives.

Thanks Phil. First of all, I would like to thank all Skyworks stakeholders including the board, the executive team, and employees around the world for many years of strong collaboration. It's been an honor and privilege to serve as Skyworks CFO for the last eight years. I only worked for a short period of time with Phil, but I know that under his leadership, with the help of Mark and Todd and the rest of the executive team, Skyworks will prosper in the years ahead. Now let's turn to the quarterly results. Skyworks revenue for the second fiscal quarter of 2025 was $953 million, above the midpoint of our outlook. Mobile revenue was 62% of total revenue, down 17% sequentially, consistent with historical seasonal patterns as demand normalizes following peak holiday shipments. Revenue from our broad markets portfolio, which includes Edge IoT, automotive, and industrial and infrastructure, networking and cloud, increased 2% sequentially and grew 3% year-over-year, marking our fifth consecutive quarter of growth since reaching a cyclical low in the December quarter of 2023. This sustained momentum reflects the expanding diversification of our business even amid a volatile microenvironment and ongoing inventory digestion in certain end markets. Gross profit was $445 million with gross margin at 46.7%, exceeding our expectations, driven by favorable mix, continued execution on our cost reduction initiatives, and operational efficiencies. We also made further progress in improving our working capital position, marking our ninth consecutive quarter of inventory reduction. Operating expenses were $223 million, aligned with our strategic priorities. These investments support our long-term technology and product roadmaps. Looking ahead, we remain focused on striking an appropriate balance, investing in innovation and strategic market expansion while maintaining cost controls to protect and grow profitability. We delivered operating income of $222 million, translating into an operating margin of 23.3%, demonstrating financial discipline as we invest for growth. We generated $5 million of other income, and our effective tax rate was 13.4%, driving net income of $197 million and diluted earnings per share of $1.24, $0.04 above our guidance. We demonstrated robust cash generation with operating cash flow of $410 million, capital expenditures of $39 million, and a free cash flow of $371 million, or a 39% free cash flow margin. Our ability to consistently convert earnings into cash is a cornerstone of our financial strategy. Throughout the second fiscal quarter, we remained committed to disciplined capital allocation, returning value to shareholders through both dividends and share repurchases. During fiscal Q2, we distributed $111 million in dividends and repurchased 7.4 million shares of our common stock for a total of $500 million, translating to over $600 million capital return to shareholders, the largest quarterly return ever. After the end of the quarter and through May 2, we repurchased an additional 3.6 million shares of our common stock for a total of $212 million under an established 10b5-1 program. At quarter end, we maintained a solid cash position and a well-structured balance sheet with over $1.5 billion in cash and investments and $1 billion in debt, providing us with financial strength and flexibility to support both near- and long-term priorities. We view our strong balance sheet and consistent free cash flow as key strategic assets. Before we go into the details of our outlook for Q3 of fiscal 2025, I'd like to briefly address the recent macroeconomic and tariff developments. While the evolving tariff landscape presents new complexities, we believe our diversified global supply chain positions us to navigate potential disruptions. As this is a dynamic environment, we will continue to actively monitor the situation. With that context for the third quarter of fiscal 2025, we anticipate revenue of $920 million to $960 million. We expect our mobile business to decline low single digits sequentially in-line with typical seasonal patterns. Broad markets remain on track for another quarter of sequential growth, with year-over-year trends accelerating. We are encouraged by improving bookings, backlog, and channel sell-through. Gross margin is projected to be between 46% and 47%. We anticipate operating expenses in the range of $220 million to $230 million. As we continue to invest in our technology and product development roadmaps fueled by our strong cash flow generation. Below the line, we anticipate $5 million in other income, an effective tax rate of approximately 13%, and a diluted share count of approximately 152 million shares. Accordingly, at the midpoint of the revenue range of $940 million, we intend to deliver diluted earnings per share of $1.24.

Thank you, Kris. As we wrap up, I want to take a moment to reflect on some key business initiatives. First, we must reinforce our leadership position in mobile, focusing on what we do best, developing the most innovative solutions in the industry and delivering the highest performance RF products to our customers. Second, accelerate the growth in our diversified businesses. Third, optimize operational efficiency with cost discipline and gross margin improvements. Before I close, I want to thank our employees for their incredible dedication and our customers and partners for their continued trust and collaboration. Operator, let's open the line for questions.

Thank you. We will now begin the question-and-answer session. We'll go first to Chris Caso at Wolfe Research. Chris, your line is open, and you may be on mute.

Hi. Good morning. I hope you can hear me now. So welcome, Phil and Kris. We'll certainly miss you. But perhaps, Phil, the first question would be for you. You haven't been at Skyworks long, but I'm sure you've been working hard to kind of dig in here. Perhaps some initial thoughts about strategy, about sort of where you're looking to take the company, just kind of an assessment of what particular strategic changes you might be contemplating at the moment.

Yes, thanks. Thanks, Chris. Appreciate the acknowledgment. Some of the things I've been most excited about so far, I mean, first, when you look at the core technology and the core engineers that we have, some of the smartest people I've worked with in my career and really are at the foundation of kind of the core wireless capability you have. And so, one of the things I'm most excited about when you think about where Skyworks positions long-term, you look at how many devices are out there connected to the Internet, and the vast majority of them are and will be connected wirelessly. And some of our core technology is right in the center of that. And so, I think you can imagine that some of the things I'm looking for going forward is how do we take and build upon that core wireless capability and look for adjacencies that continue to fuel that growth. And that's really where I'll be focused some of my energy.

Great. As a follow-up question, it's with regard to broad markets and it sounds like you've seen a little bit of bookings improvement and certainly some sequential growth there. What sort of, I guess in the short-term, what sort of growth do you think? Well, I guess to start, do we think that customer inventories have now normalized and therefore, we're getting on a more normal growth path here? And what do you think that growth path is likely to be? Where do you see the longer-term growth in this broad markets business and where's the trajectory for the rest of the year?

Yes, I think, you know, that's a good question. I think in general, like if we look, step back and look overall at those businesses in general, I think if we look in general, a lot of those businesses still had pretty significant inventory corrections post-COVID. In many cases, some of the business, some of the businesses had the infamous golden screw, right? And so as a result, customers just bought tons and tons of inventory. I think in general across the landscape we've seen a normalization of that. We started to see inventories getting back to normal positions, booking trends continue. So, I think in general what we're seeing is kind of that hangover that we experienced, we think that's behind us. If we dig down, right, and look at the kind of the three segments underneath it with Edge IoT, that's really about Wi-Fi 7 adoption, right? That is really at the early ages or early innings, I would say, of deployment that has more RF content per device, better performance, strong customer value proposition. I think that'll be a tailwind for us going forward. On the automotive side, we're seeing good year-over-year growth there. And it's really important to note that what we're seeing there really is not just tied to EVs or particular how the combustion engines, whether it's EV combustion engines or hybrids, it's really around the software-defined vehicles and all the connectivity that's around that. And so we're seeing good growth there. Then on the infrastructure networking cloud, that's an area where it's still a little bit choppy from that side. But I think long-term, some of the secular trends with respect to what's happening in the data centers and the connectivity space I think that's going to continue to normalize there as well. So on balance, I think we've seen right overall inventory correction. We're starting to see some return to normal growth. Then underneath that it's Wi-Fi 7 connected cars and infrastructure networking cloud. That's kind of how we see that.

We'll move to our next question from Karl Ackerman at BNP Paribus.

This is Yan Pooh for Karl Ackerman. Thank you for taking the question. So, I just want to touch on tariff. I know it's a fluid topic but I just want to understand how your view, how do you view tariffs and what portion of your cogs could get qualified for USMCA import exempt status given that you have the Mexico fab. As you address that, could you also discuss how you can how much of your ability to pass down tariff costs to other customers? Like, thank you very much.

Yes, so this is Phil. Maybe I'll just take a high-level remark and then I'll pass it over to Kris for any particular details on it. Look, in general, the tariff environment is incredibly dynamic, right. As you can probably imagine. I'm not telling you any news there. I think our current assessment though, given our supply chain and where we are, the current guidance really reflects any impact that we see from that and we're continuing to monitor that daily. I think our guidance reflects what we believe to be the current environment right now. I think our diversified supply chain where we ship things, how we ship them, where we get them, manufactured with free trade zones, all sorts of other things that are happening. I think all of that is reflected in our current guidance. Having said that, obviously we monitor every single day and we'll continue to do so. But right now, the current guidance reflects what we believe is the current environment for tariff. Kris, any other comments you want to say?

No, just, I mean based on our current understanding of the tariff landscape, we don't see any major direct impact on our business. Obviously, we will continue to work with our customers and supply chain partners but for now as it stands, no major direct impact on our business.

Thank you. And as a follow-up, can you discuss will you be able to maintain your CapEx outlook or do you have any intention to move around your manufacturing locations to avoid tariffs? Thank you.

Our CapEx spending is really focused honestly on new product, new technology development versus any sort of production capacity. So, any, most of the CapEx you see, the vast majority of it, is on new technology development. So I wouldn't necessarily see, I wouldn't expect to see any change with respect to our CapEx plans based on that.

Right. And just CapEx is running on or about mid-single digits as a percent of revenue.

Thank you very much.

We'll go next to Edward Snyder at Charter Equity Research.

Thank you very much. A couple of questions if I could. First off, it looks like based on the content in your largest customer's phone, from the teardowns we've done and other folks have done and stuff we saw from last year, that is it fair to assume that you think your content will bottom at the end of this year and then maybe make a slow recovery? I know it depends a lot on mix and I know that's hard to predict. I think Qualcomm guided for 30, 30-70 mix favoring their solution. So I just want to get an update on your view of where you think your content will bottom into your largest customers? And then I have a follow-up. Thanks.

Yes. Hey Ed, it's Phil. Nice to talk with you again. You know, as you might imagine, we can't really comment on specific customers plans and what's getting going, but generally speaking, let me try and give you a little bit of color. I mean, when I look holistically, I think we have some tailwinds behind us in that regard. The first is we've got to deliver better products and compete for the sockets that we believe we have the chance to win. And I think we're putting our best foot forward there on that. Second, I think there's going to be a trend that's going to have more RF content as I talked about with complexity, workloads, MIMO capabilities and those kind of things. And then thirdly, I do think there's some potential content differences that may happen with respect to certain solutions that may happen on the baseband side. And I think some of those trends right, should play in our favor. So look, I think overall, I think there's, there's three things and then you overlay that where hopefully you get some tailwind on the unit side. Respect AI adoption and I think we've got some things that work in our favor. Look, we have to continue to execute. As I've always said, we've got to deliver great products. You have a great product, you win, you have a jump ball, you split and you have a bad product, you lose. And that's the game we're playing. So that's what we're focused on.

Okay. My follow-up, I know that. Well, your filters are built out of Japan. BAW is anyway. And then the part that you kind of gave up to Avago, used a lot of those. And so you got utilization issues there. First of all, between the lower utilization and some of the advances you made in filters reducing the die size, is it fair to assume that even if you were to win a larger module that takes a lot more filters, you wouldn't have to put a lot more CapEx into that facility or it depends on the module like the mid-high band, et cetera? It's got 22 filters in it. No matter what, if that were to come about, you're still going to need CapEx expansion even with where you are today?

Thank you, Ed. I want to clarify the specific area you mentioned. I would describe it as a competitive situation where we share outcomes rather than having a complete win. Regarding your point about capital expenditure expansion, I believe we have adequate production capacity at this moment, and I don’t foresee any capacity issues. Our investments in capacity are currently directed toward developing new technologies needed to drive innovation forward. Therefore, I'm not expecting any additional capacity requirements for production based on my observations.

Okay, but just to be clear, you have to have the capacity in place before you're awarded a big modular, any big OEM. Correct? This can't be done after the fact. Correct?

Right. And so Ed, we do have plenty of capacity in place to absorb a potential large upside to the business.

Great, thank you.

Next, we'll move to Gary Mobley at Loop Capital.

Hi guys, thanks so much for taking my question. I really just have a multi-part question and that's it. Phil, you highlighted your three priorities, one of which is stabilizing and maybe regrowing your business with your leading smartphone customers. So do you feel any differently today versus what you communicated last quarter with respect to your blended content in the upcoming, you know, smartphone launch at your largest customer? And then with respect to optimizing operational efficiency, could you give us a sense of where your utilization rates are now and what those, what the goal may be in terms of optimizing that manufacturing footprint?

Yes, let me, let me try and I'll have Kris jump in here. You know, I think the one thing, you know, the, I guess I would characterize if you look at, in general, the mobile business in general, it's characterized by very short product cycles. You got to earn the business every year or every other year. You got to deliver highly competitive parts and it's a very competitive landscape. I believe we've got some of the best, if not the best RFA engineers on the planet. But sometimes having the best team on the floor doesn't necessarily mean you win every game. But I'm feeling very good about where we are, the investments we're making, the people we've got, and we're working really hard to do it and we're laser focused on doing it. And frankly, I'm taking a no-excuses kind of thing. Right. We just got to deliver better parts, period. The answer is we've got to deliver better parts. There was a lot of rhetoric around stuff being done to us, and I just don't like that rhetoric at all. I think the reality is we got to deliver the best parts and we'll take care of ourselves and frankly, that's what we need to be focused on. I think your other question was around?

Yes. So, Gary, as it relates to utilization rates, obviously, we have multiple factories in the U.S. in Japan and Singapore and in Mexico. The utilization rate varies by manufacturing location. But I would go back to my previous answer. We have plenty of capacity in those factories. And so as future revenue growth is going to fuel better factory utilization, that will lead to gross margin improvements without us having to put much capacity in place to fulfill future revenue growth. And Gary, maybe as it relates to, of course, the blended content at the next upcoming phone, that obviously has not changed.

Thank you, guys.

Our next question comes from Christopher Rolland at Susquehanna.

Hi guys, thanks for the question and welcome Phil and Kris, sorry to see you leave. Phil, you mentioned some wireless excellence at the company and looking at adjacent markets also, you came from the IoT world previously. Could that be an adjacency for you, whether it's cellular or unlicensed?

Yes, look, I'm not going to comment on particular areas of focus there. Obviously, I came from the IT side, but I would say my purview is a very wide, wide landscape. I mean, some of our core technologies are, you know, acoustic resonators, filter design, some of the core processes that are involved in that packaging, multi, multi-chip packaging modules, very tight integration. I mean, the technology required to deliver some of our solutions is just incredible. And so, you know, I look to a wide, a wide range of things where we could go there. So, I'm not going to comment on specific, specific areas, as you might guess.

Fair enough. And then secondly, saw and typically lower frequencies. You have made a push into BAW, but we haven't had any major updates there, I think in a little bit. Is this a focus for you and is there kind of, do you see any evidence of greater traction in BAW moving forward and doubling your efforts there? Thanks.

Look, I think BAW is like a critical component of our technology and we remain significantly invested in that and we've got a very robust roadmap going forward. And so I think we've seen good traction in that and that continues to be a cornerstone of our investment.

Thanks a lot.

Our next question comes from Tom O'Malley at Barclays.

Hey guys, thanks for taking my question and Phil, Mark, congrats on the roles. Look forward to working with you. A tactical one first and then a longer-term one in the March and the June quarter. Can you guys give what Android did in both of those quarters in the mobile business?

Yes. So Android was in the March quarter flat on a sequential basis. So, in that call it on about $70 million range. But we do expect a sizable sequential bump up in the June quarter for Android.

Okay. And then I guess the second one is the broader one and that kind of encompasses the answer there. But when you're looking at what you think is pulled forward, obviously there's a new phone that's launching or that just launched here that's going to help you with some content. But obviously buying patterns are a bit different and Android traditionally isn't seasonally up in June. Can you guys try to parse out to the extent that you can, what you're seeing, what is a pull forward, what is better demand and how you guys are going about that internally to protect against potentially like stronger first half, weaker second half? Thank you.

Yes, that's a good question. Look, we continue to monitor that care, you know, closely. I don't think, you know, order patterns now represent what we've seen historically and represent seasonality. And if you look at kind of our results, it was kind of in where we in the range or a little bit above the range where we started in January, which is before a lot of this turbulence. And so I would say that what we've seen is what pretty typical order patterns at this point. Obviously, we're trying to manage it closely and we're keeping a close eye on it, but that's the best we can say now. No evidence of anything other than what we'd expect to see seasonally at this point.

Our next question comes from Harsh Kumar at Piper Sandler.

Yes, hey, congratulations, Phil. Looking forward to working with you. Kris, I've worked with you multiple years. We'll certainly miss you and best of luck to you. So Phil, I wanted to ask you about follow up maybe on the new modem at this large customer and what that means to you. Typically, with that there comes a lot of shifting around of content and provides a lot of opportunity for people. So, I'd be curious how you view this content and maybe you could talk about what this means to you and what you might have won and what you think you can do with this. And I've got a follow up.

Yes, so look, I think that we can't really get into those specifics per individual customer and segments and what happens really, it's not something we can do. But let me just comment just in general, why I think there's some tailwinds there and I would focus on probably what I would say is more secular long-term trends with respect to increased RF content as a result of things like more transmit, higher power requirements, lower battery requirements, new frequency bands, and certainly any particular choice they have with baseband may result in some potential incremental content opportunities for us. But I think in general, I think we do, now clearly, we have to execute, we have to deliver the best parts, but I think we've got the canvas upon which we can draw a pretty good picture.

That's it, thank you. That's it for me, thanks.

Next, we'll move to Timothy Arcuri at UBS.

Great, thank you. This is Jamal Cohen for Tim. Phil or Kris, I wanted to double click on the guidance specifically what changed versus 90 days ago, what segments you've seen improve, what got worse? And can you speak to that bump up in Android in the June quarter? What's driving that?

Well, I mean I'll let Kris jump in here because he was in the park. I mean I don't think we necessarily guided two quarters ahead. So I think what we're doing now reflects our current view of the next quarter ahead. And I would say that in general, certainly on the mobile side we're seeing pretty typical order patterns, the Android segment up as a result of new product launches that we talked about. And in broad markets we're just seeing continued, you know, sequential year-over-year, you know, sequential growth and continued year-over growth as I talked about. So I wouldn't say there's anything abnormal. And so mobile, I would say, is seasonal added on a product launch and in broad markets, it's kind of a continuation of the trend we've seen for the past few quarters.

Got it. And then one quick one on pricing at your largest customer. Do you expect to see any sort of pricing pressures in the coming quarters, given the most recent tariffs?

No, I'm obviously not going to comment on that. I'll just say it's a highly competitive market and we are expected to deliver the best performance parts at a very aggressive cost point. And that continues to be the game across the board in this industry. So, I don't think there's anything changed. And we have to deliver great parts at the right price.

Thanks, guys.

Next, we'll go to Joe Moore at Morgan Stanley.

Great, thank you. In terms of your priorities for the business, you talked about growing the diversified part of the business. Can you talk about organic versus inorganic priorities there and just how you think about that? And do you think M&A is even sort of doable in the current environment?

Yes. Hi, Joe. Nice to. Nice to talk to you again. Yes. look, when we look at overall strategies and certainly capital structure and capital allocation priorities, I think we have enough firepower to enable us to pursue a number of different options, both organic investments, and I talked about some of those. I mean, we clearly continue to invest in a level that allows us to sustain robust innovation roadmap that we have, and so I feel good and comfortable about that. And clearly, on the M&A front, I mean, there's a number of different things we can look at. I'm going to be really focused on making sure that's in our strategic priority. We can get the right value and focus on making sure that we can deliver value to shareholders as we look at that. I think with respect to the overall M&A environment, it's obviously a little complex right now. But I think that there's no shortage of things we can look at and it certainly is something I'll be spending some time on as CEO.

Appreciate it. Thank you.

Our next question comes from Peter Peng at JPMorgan.

Hey, guys, thanks for taking my question. You guys talked about seeing seasonal trends on the wireless side for the March and June quarter. But then when you listen to the earnings call from your largest customer, they're clearly talking about some inventory build for some tariff mitigation. So I'm just wondering why there's this kind of discrepancy between what your end customer is saying and between some of the suppliers we're seeing.

So Peter, maybe I'll take a shot at that. As you know, there are it's a very complex supply chain, and there are multiple partners between us and the end customer. There are distributors, there are contract manufacturers. Each of them act a little bit as a buffer and have their own inventory dynamics. Again, if you look at the March quarter, we guided to $950 million, and we delivered $953 million. So we did not really see pull-ins or anything like that. And as we guide for the June quarter, we assume there's no pull-ins. And we have no clear evidence of that.

Got it. Okay, that's helpful. And then just for the broad markets. You guys are back in the year-on-year growth for a number of quarters now. Can you maybe just talk about within that bucket which markets are showing year-in-year growth, which still has some work to do to get to a year-on-year growth trajectory?

Yes, this is Phil. I'll respond to that. The biggest factor supporting our growth is Wi-Fi 7, which is still in its early stages. Currently, only a small percentage of devices are using Wi-Fi 7, so we have significant opportunity ahead. Automotive is another area where we're seeing positive year-over-year growth, especially as more vehicles become connected, regardless of their fuel type. On the infrastructure side, however, we have some challenges. Progress is slow, with fluctuations in growth. While we expect to see some improvement, that area requires more attention to achieve consistent growth in the future.

Perfect, thank you.

Next we'll go to Nick Doyle at Needham.

Hey guys, thanks for taking my questions and welcome Phil and Mark. How big was a large customer in the quarter? And directionally, how is their broad markets piece performing? Thanks.

Yes. So the largest customer in the March quarter was approximately total revenue, and we've seen a split between mobile and broad markets in line with historical trends there, roughly 85%, ends up in mobile and roughly 15% or maybe a tad more in broad markets, and we expect that to continue in the next couple of quarters.

Thank you. Regarding the gross margins, they are maintaining a steady level above 45% even though we anticipate a slight decline in revenue next quarter. How are you managing to keep these margins above 45% despite lower utilization levels? Thank you.

Yes, well, if you look at the June quarter, you have mobile being down sequentially and broad markets being up sequentially. And so you have a continuous benefit there from a mix point of view, as I said before, even within broad markets, we see some mix shifts that are favorable for gross margins, and that's why we're comfortable to guide to this 46%, 47% range for the June quarter.

And we'll go to our next question from Vivek Arya at Bank of America.

Hi, this is Liam Farr on behalf of Vivek. Thank you for taking our questions. I'm looking at the Android market. You've been somewhat selective in pulling back in certain areas of the Android ecosystem. As AI and RF complexity increase, how do you plan to reengage more deeply with Android OEMs to capture additional content? Or are you maintaining your focus primarily on the high-end segment of the Android ecosystem? Thank you.

We are always open to collaborating with customers where we can create value and ensure that our solutions are economically viable for us. If there are trends that align with this, we will certainly seek to capitalize on them. Our approach is based on an economic return on investment perspective. The opportunity cost for engineers is significant, as many of these solutions are complex, highly engineered, and integrated. We prefer environments where we can provide value to the customer and receive appropriate compensation. Therefore, we will continue to seek out those types of solutions.

Thank you. And then just a quick follow-up on your largest customer. Looking ahead at 2026 models and 2027, how are you too the time line of engagement with that customer? When should investors be looking to hear from that? And how are you kind of betting up to hedge against any more jump balls that are split?

I can't comment on specific matters, but we've been deeply engaged with that customer and all our customers in general for an extended period. There is a typical investment design cycle that occurs annually. Often, we invest proactively to develop technologies for the future. We continuously evaluate our performance, akin to reviewing game film in sports, assessing what we did well and what could be improved. We conduct competitive analysis, exploring the limits of our technology while delivering components that get benchmarked against competitors. If we perform well, we achieve success, and that's our goal. I don't see any changes in the dynamics. Regarding our ability to adapt, I believe the best approach is to continue executing effectively. This customer is demanding and requires significant attention. However, it’s such a substantial client that we must maintain our efforts consistently throughout the year.

Thank you.

Ladies and gentlemen. That concludes today's question and answer session. I'll now turn the call back over to Mr. Brace for any closing comments.

Great. Thank you. Thank you for participating in today's call. I look forward to speaking with you at upcoming investments during the quarter and we'll talk soon.

And ladies and gentlemen, this concludes today's conference call. We thank you for your participation. You may now disconnect.