Qorvo, Inc. (QRVO) Barclays 22nd Annual Global Technology Conference (Transcript)

Company and Industry Overview * Company: Qorvo, Inc. (NASDAQ: QRVO) * Industry: Semiconductor and Semicap Equipment * Event: Barclays 22nd Annual Global Technology Conference, December 12, 2024 * Participants: Grant Brown (CFO), Dave Fullwood (SVP, Sales and Marketing), Philip Chesley (President, High Performance Analog & Senior VP) Key Points Business Segments and Growth * ACG (Analog Components Group): * Strong position with largest customer, driving content gains over multiple years. * Shift from mid-tier 5G to entry-tier 5G in Android business, focusing on flagship and premium tiers. * Growth expected in mid-teens. * HPA (High Performance Analog): * Expansion in defense and aerospace franchise, particularly in power management. * Growth expected in mid-teens. * CSG (Custom Solutions Group): * Strength in Wi-Fi, investing in diversifying growth businesses like automotive solutions and SoCs for ultra-wideband and Matter. * Growth expected in mid-teens. * Overall Strategy: * Reinvest cash flows into attractive opportunities and focus on profitability. * Reduce capital intensity and deliver on long-term financial model. * Execute share repurchase and evaluate inorganic growth through acquisitions. Large Customer and Content Growth * Largest customer accounts for over 50% of total revenue and expected to remain at that level. * Secured sufficient wins for year-over-year content growth in 2025. * Investing to grow content further, engaging on more product programs than ever before. Financials and Margin Improvement * Gross margin headwinds in December and March quarters due to Android mix shift and utilization. * Actions taken to improve gross margin, including: * Removing variable costs. * Reducing fixed costs through capital intensity reduction and workforce reduction. * Adjusting Android roadmap to align with flagship and premium tiers. * Reducing digital transformation spend. * Divesting Silicon Carbide business. * Targeting 50% gross margin by fiscal year 2026. * Actions expected to take out over 100 million of COGS and OpEx annually. Growth Focus Areas * **HPA**: * D&A (Distributed Antenna Systems) and Power Management. * Growth driven by technology upgrades, electronic warfare, and communication and SATCOM segments. * Targeting 1 billion in D&A revenue by fiscal year 2026. * CSG: * Ultra-wideband, Matter over Thread, Wi-Fi 7, forward sensing, and automotive connectivity. * Multiyear drivers expected to deliver mid to high teen growth rate. Manufacturing and Security * Significant overlap in production facilities between HPA and CSG, benefiting from economies of scale. * Qorvo has assets located in the United States, providing a competitive advantage in the defense and aerospace markets. * Qorvo is a U.S. Trusted Foundry, ensuring security infrastructure and capability for sensitive information.