NXP Semiconductors (NXPI) 3 Aug 212021 Q2 Earnings call transcript

Good day and thank you for standing by. Welcome to NXP's 2Q '21 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's call is being recorded. now today, hand Mr. would to conference I speaker your Instructions] like the to over [Operator Jeff Relations. Senior Palmer, Vice President of Investor ahead, sir. go Please

NXP that be Peter call will today the Thank Welcome Kurt Sievers, and financial earnings the good forward-looking and and call Please no today risks new is publicly CFO. can current Today's With Semiconductor's CEO; which The but continued or President macroeconomic from call are specific expectations the expectations. of and call. include end regarding the of results you, our we include, XXXX reminded COVID-XX our second update the for uncertainties existing differ management's on statements impact statements obligation replay risks morning, NXP's These me that NXP's products quarter Kelly, materially not our XXXX. of third operate, Crystal, to and NXP limited is being cause business, uncertainties available undertakes recorded to results pandemic the impact quarter corporate revise for and involve forward-looking will markets and be that from on and website. in to, for the sale to our statements. the on any everyone.

For release. a refer please full press disclosure of to our forward-looking statements,

Form at release, to Relations GAAP earnings the core in events underlying on measures will we NXP's in of does financial comparable management that not NXP discrete performance. are which refer related the has X-K consider our Regulation nxp.com. be by to section NXP's G, available Additionally, press to to be Investor reconciliations website non-GAAP will primarily the and certain the which non-GAAP Pursuant measures, driven furnished measures provided SEC to on directly directly QX most to financial operating

on At Thursday, in Analyst on Before we City upcoming highlight XXXX. New in-person hosting November an event today, we Day. the I'd call planning to time, York this XXXX like our start XX, are

open parties will to up the to site Kurt. an over I be over suggest week, now registration pre-register interested the space to cycle. online will next would like call this We as would turn and we limited

really Yes. and our three. an our Thank how discuss and quarter I updated I joining everyone. provide today. call quarter the We you environment. very our review you guidance will on two good will appreciate demand current morning, Furthermore, Jeff, results much, perspective we view will I for

markets with the better industrial At our the were start of the Now the me the quarter from midpoint results guidance all time, the of mobile of and communication let infrastructure guidance. our stronger than end our contribution planned same midpoint Overall, our than trends slightly above auto, and in were with the the guidance. above end markets two. high

XX% two revenue guidance delivered of our knew increase NXP are Taken $X.X quarter and together, billion, These given range. quarter. results $XX the constrained entering we of supply year-on-year million the above the position face would we good an of midpoint very

ago period guidance. quarter of non-GAAP a points XX than basis midpoint year and X,XXX better two Our XX%, was our points in the basis operating the above strong margin

Our strong by operating a profit performance richer product was mix. driven

industrial XX% me midpoint of focused up me move automotive, was two two and lastly, $XXX the was guidance. guidance. revenue about above year-on-year, to and XX% year and slightly $XXX our midpoint better XX% $XXX two In quarter revenue let quarter let revenue midpoint mobile, slightly million however, quarter in other, year our versus X% the infrastructure period and in our million, the versus of two our was billion, ago markets. In the to trends the was guidance. outlook. million, IoT, period quarter than our million, slightly Now above and end the $X.XX year And turn $XX period of revenue ago up versus up our ago above With specific In guidance. down this, communication the

point, and two in the the be the We year-on-year and to of this two quarter up quarter low-XX% sequential within At year-on-year. are billion, 'XX. expected range on in infrastructure year-on-year guiding low-single-digit Automotive update year up quarter. range period is be a and down XXXX, versus the to Mobile prior basis. and XXXX the this and is IoT mid-single-digit and mid-single-digit the midpoint quarter demand range following versus be range, the perspective, versus at position. midpoint high-teens the range expected let down midpoint of XX% in XX% of you communication two up versus we give to up in to expected revenue up quarter in to quarter range is our third the And same the mid-teens XX% anticipate range finally, ago the about percent up up in the in versus range low-single-digit in From to NXP's this is three three $X.XX a versus expected business. other 'XX. range up 'XX. XX% is the of an versus on me quarter be sequential the a current Industrial trends At up the up XX%

and experienced. to last product be supply As with quarter challenge earnings indeed on is we I two, call, in our what had this shared anticipated a you we

continuation short-term a We the With closely do a very to be most day-to-day of work basis we challenge our foreseeable customers accommodate supply the expect with future. on to demand, for to pressing continue requirements. robust their

improve. the and orders last to see the to foundry began growth took in will our the quarters. we fabs on months, revenue anticipate various do our wafer of supply and actions supply partners subsequent beyond, support and We from based increase three internal two, all during nine six we over which quarter of continued quarter During wafer

demand achieve also working taking significant A we action our on additional number to with of markets, to based supply However, for demand situation extended by the all outstripping components versus non-cancellable the we that non-returnable of own not discussions secure NXP customers a supply. inventory along also analysis, are chain. customer diligently of Furthermore, current there supply customer across our our balance orders healthy are supply, see end we excess placing term. believe and based medium is and do a on

markets. order assure clearly our and Additionally, the assembly to front supply capabilities wafer end we end long-term test making concerning within Notwithstanding the well the profitability underlying so supply results as to our challenging as and avoid investments business. cash-generating a growth, direct this internal back potential bottlenecks contractual and customer our associated investments detailed demand and base, commitments as front industrial our as long-term continue very make and to excellent to commitments and significant across to as end partners expand internal in capability include result investments conversations especially of foundry end our These materializes. validate automotive guidance of environment, capacity supply our long-term

industrial these validated we company-specific will automotive secure growth. focused battery few drivers investments continue win the and all key shared solutions opportunities significant by our awards. unfold and customer And just at to contribute processing with IoT of edge are design complete of to very our to strong are the you Product enable future market, them a and well Teach-In, have management connected These revenue markets and long in continue systems, growth We being end our the including market. our processes the our as zonal electrification solutions, XX systems, anticipated. domain have broad-based our strategic to products, our drivers we in gigahertz within our e-corporate the see And all radar include

within quarter anticipate on While marks strategic are highly we term very we rebound across will end end markets. greater of revenue an upside by for not demand just quarter a be And In guidance continued beyond specific provide encouraged do we our and than four basis. we current our the are in the markets. consistent will NXP beginning absolute longer that the rapid XXXX summary, quarter, confident three

highly employees Our drive are success. our to engaged

products. We our all design a future and pipeline win engagement the potential about of of and response the have customer innovative And NXP. momentum robust underpin optimism new

speak plague the in with regions we Asia Southeast like most remarks, and have would to impact recently. second prepared the India remains COVID-XX namely to operations, I pandemic that The NXP. multiple the Before active concluding quarter where on continues pandemic to my spikes continue have to

remain very our safety continued vigilant to enforcing across We protocols sites. global all our of

several drives initiated for team and families. in their successful countries vaccination have our We members

in of However, all their highly challenging of our Delta customer resilience contagious energy the that supply proud especially for the success. and complete teams for reverse I commend in pandemic during relentless the situation to customer-facing the which like their to assuring a hard of and the variant make at work very truly our we their operations home employees very while has for same is difference. dedication work a our It I extremely this focus am manufacturing time, face challenging period. environment would our their and and dedication locations. required and their several from

like financial our for performance. would Peter? I call of the to to Now review over you, a pass Peter,

morning Good on Kurt. today's Thanks, to everyone call.

highlights. already covered end of revenues the the were profit above which was gross move of good, third range the non-GAAP both of and financial guidance revenue drove quarter, outlook second Overall, the non-GAAP drivers profit, the As our of quarter guidance I'll above very range. for during improvement financial second we the the Kurt has to our and performance and our of high revenue provided our an midpoint operating quarter were

foundry with coming growth NXP long-term have believe supply agreements we we our which robust periods. to Additionally, in partners, implemented deliver the enable will

non-controlling $X.X from margin points million, gross quarter. the profit ongoing above non-GAAP We our billion by a guidance. midpoint as first and to above margin interest in our gross was was our $XXX and basis non-GAAP non-GAAP were up end million operating new details Now XXX and of half increased year-on-year above basis in above $X.XX million year-on-year we and the performance. of a early was was billion, million. reported profit guidance up and to of moving the guidance high midpoint operating interest XX% and operating were for the driven $X second issued the $XXX up variable debt was second non-GAAP taxes X,XXX the points $XX Cash an Total XX.X%, up million quarter. non-GAAP due our $XX expenses high million, total generated $X billion guidance. up was improved quarter. the Total $XXX million $X the revenue of XX%, above Non-GAAP million perspective, of range. $XX $X and end profit This year-on-year million guidance operations of of year-on-year From comp operating expense was

items in $XX which is earnings, compensation, the Stock-based our together, line included million. $X Taken below was were not guidance. non-GAAP better than the million our

debt. and cash Now to I'd our turn the like to in changes

Our the at total quarter mentioned an billion due of increase $X.XX the second the end billion, $X.XX issuance. debt to of previously was debt

new the billion. ending $X.XX by and due offset generation, position cash EBITDA quarter returns trailing we cash The $X.XX resulting billion, was $X.XX $X.XX a of net adjusted quarter. up sequentially debt billion, the with debt Our and was exited capital to XX-month during billion

Our EBITDA interest ratio trailing EBITDA QX of was and net adjusted of XX debt X.X coverage adjusted XX-month end the at to was our XX-month times, times.

sheet strong. and to Our balance liquidity our excellent very is be continues

total capital the Subsequent XXbX-X quarter, of billion quarter program, million an additional our of our returned billion and of to and of $X.XX owners. our owners $XXX repurchased repurchased we end resulting During second of dividends X between the to year-to-date. $X.X second for our a shares return August cash a our of in July we billion total paid $X in shares X, $X.XX via to the billion

days, Days XX was capital to Turning increase working an inventory X metrics. sequentially. days of of

XX deliveries our increase support wafer levels. very quarter our finished of to target wafer continues QX ramp, in to low supply increase -- the in below work process be a supplies due driven while to revenue Our days, an goods DIO continued in long-term to sequential and drain was by to

days rates long-term quarters we're and months, closely the sequentially manage several strong metrics before rebuild the to We in quarter our environment. sequentially targets. of our channel long-term on-hand and we XX continue inventories orders Days XX, material days days inventory to distribution reflect able below and X.X at to a target receivables channel increase will -- were payable of levels. take our tight versus customer on-hand were suppliers. continue flat increase It XX as supply up X our prior channel continuation Both and the an to order to with inventory days,

from deliveries Taken was operations Cash in prior was improvement conversion in XX and cash an strong days, together, demand, non-GAAP periods. flow of future million. cycle versus flow for was and solid our free customer X quarter, $XXX net of cash positioning the million, receivables $XXX reflecting CapEx collections customer day resulting $XXX million

for third our quarter. expectations to the Turning

QX anticipate year-on-year $XX million. sequentially. $X.XX be we mentioned, midpoint, is minus this or up XX% Kurt At As billion to revenue plus XX% the and

We Operating expect non-GAAP million, $XXX plus million plus XX.X% expenses consistent or minus to minus expected to XX our are margin basis or with about gross long-term be model. $XX about about be points.

QX, down Non-controlling midpoint. Taken purposes, for we be an to to share shares, average year. see be the into year the margin financial about together, cash note, XX% count the XX% down execution $X of our year it XX about to anticipate And the non-GAAP use a to interest indicated you cash as loaded that end capital we XXXX at will $XX We for would ago be -- the $XX half second about from million. XXX be modeling during full we expense about communicated million X% non-GAAP policy. be back of be suggest approximately million about is consistent operating result million. million about operations for the period to ongoing and sorry, we estimate tax second related Please quarter, taxes anticipated shares which of that of then return and

a to end be continue strong trends newest comments to in like I'd make. continues be demand Finally, I products robust. One, to across have target markets interest our customer and our few closing

order suppliers diligently timely request are with and our manner. We working address a our in customers to

potential clear our margin will us our of midpoint as third drive revenue the in as our enable gross flow growth targets. reflects margin profit business significant our both model, the guidance of of terms quarter through, Secondly, gross above non-GAAP well the which to

business free our continues significant Thirdly, to cash generate flow.

manufacturing front back but increasing We end existing our CapEx end output continue to wafer capacity factories. capacity, our capabilities, in to expand to increase the invest internal of also our

all We flow are excess trailing below all adjusted cash steadfastly committed or cash -- X at our will long net return return so ratio leverage owners free our to XX-month our to capital times to policy as debt and free EBITDA. excess remains

growth as the we is And anticipate mentioned, believe strong. as environment demand the into robust for continue constraints, XXXX. to XXXX remainder Kurt we supply As well the notwithstanding of

we Finally, questions. to now back thank the are all outstanding I'd I'd work operator still dedication. for working on like forget my the all pandemic and their stringent colleagues it to to shouldn't your protocols. like We that for turn

Your first line Instructions] the Muse question comes of CJ [Operator Evercore. from from

line Your is open.

I Thank more hoping question morning. Kurt. was Good first Yes. guess, auto you for taking state the could speak about current question. for the industry. you I the you, of

is rate sustainable auto I than think trough gives that to hear peak is closer that fear strength you some confidence among a current and love run thoughts, to your would investors is into beyond? there 'XX the what and

hi. Yes, CJ. Good morning,

mentioned the thanks it's eCockpit, surpass XXXX. in electrification, in this from really the volumes are that have the prepared year pace year, this while the SAR we a accelerating that discussed point that then content growth broad look market content to convinced xEVs. and to clearly peak, a zonal NXP. more is clearly XX%, market. from to I I'd consensus probably especially is way there levels like gains, going The my a little, grow general pre-pandemic a maybe at to drives are in away the only We content the XX% absolute auto latest around are is specific far in that accelerated and management really, for remarks, around from IHS, end and the especially another grow next we've going our to that's perspective, gains, data from many will it the actually strength the say we But gains times and And importantly, company-specific past, as of battery in CJ, radar, few processes year

had faster anticipated. see of than of So as is the growing anybody car number a the we do that xEVs production portion total

further I'm was XX% production strong a then It's it the this total growing driver So compared market. auto the like and year for significantly from traditional quoting latest higher more fast content Since here, see, of like think engine next for car the combustion have xEVs quarter last be data to vehicles, to dedicated going year we again, silicon there another onwards. I IHS a is xEVs.

of a the far very trust to that with wants needs, a shipments out. peak. trying in finally, of their day wants from serving customers pressing that. And fulfill really to both daily away the So contact day can which companies on X us, know sure because the tactically, companies the CEOs hear car and everybody in speak I'm most level make are and car we about daily Tier handholding mean, me, the I to themselves, I

extended So cars. there chain. of a to more is They build piece want in the single inventory anywhere not supply

So I growing. have any keeps confidence that this

very follow-up, a are as guess, That's helpful. Thank you. margins Peter, stellar. I gross

costs positive from presumably reading about here had from and would how was continue COVID-related think have are that XX-Q, thinking your side? costs. higher mix uplift be not to the that And loadings, you you but we on unwinding? you I thinking loadings I move personnel What of benefit of a that higher? impact current helpful as increased about kind talked guess should levels, How about

terms enough margin. big disinfecting of sure of obviously, factory medical in not lots the been to our relatively think are the really of support, the We've more factories the all the so -- but have the cost of way -- past. honest, in mean, running of I paying much same To be really you've on often. kind gross for I we We've costs I'm first think our I it's COVID the low. in context influence got the test been the margin. just

of go QX. we additional as seeing the the QX of benefits you're terms from in utilization, that think I to

So out. QX XX.X% our gross our really full with guidance, factories running margin shows in our

won't go utilization So kind because QX. of capacity. we running actually revenue have much full pretty add into you and We're increased in as we out XXXX, see expand our to

in think we've more And your still there So product XX% gotten a years I we introduction. quicker XX% QX a to is from us of away number is back and I great run think utilization helped is QX, of and impact is we couple factories, able question -- still, additional answer we is and is the really out. from Mix new did to big think why and better sort do. being the QX QX into But for into us, QX the bit I the around little that's particularly our still QX. a end than thought to full would

Very Thank helpful. you.

question ahead. America. line next go the the from Vivek comes from Your Please Arya of of Bank

for you Thank questions. taking my

the production On I inventory to today, touch that industry there in you supply look one, we any supply. if around that we how see isn't example, appreciate enough specific reassured be headlines that? daily as foundry increases increasing the meet Kurt, mentioned and microcontroller think for also you will So but customers disciplined? what when you any So increasing react be industry autos, importantly, specific should response significantly, mentioned, the first that should do to with is are you demand? to investors supply And to

is how So overwhelm supply we response assured not demand at the some going point? to should be that

Yes. Good Hi, Vivek. morning.

far I this, mean, taken year, given and of you lows day, XX% some revenue you, that's reassure that read takes But because shipments, isn't first think increase think -- from or are really the our also still up much. foundry every then away industry always are at And and can every supply mean last are point, a industry microcontroller of quarter headlines last from record in referring is what auto cycle over around second I short this again, year. carefully. together through I very, we to want I this our very also there the and XX% about the statements as the the perspective. supply you is I the watching course, to in quite Of we

a year comparison. not last So good is

industry meaningful a production from was car to more even more at to back levels XXXX I benchmark XXXX peak or think when perspective. it's the

this? most So of I check how very product really do we application-specific. say mean, I would is our

And where are the with also we is in not OEMs directly going. only the that X the product new extremely contact. So but suppliers, is with close Tier

with have to months about before true the number history. is on quarter very know the before, as a not than on goes we've And again demand super the inventory distributors. we months. distribution, target -- the continue I in number had you on be much mean, as that's we around ever with really you So X.X disciplined meantime our X.X, model very, think visibility And a more a as we if good through of published, our low but that in portion the stayed we same X.X. the which always, more

it So we watch very carefully.

it is still car into we situation given increased, that away question what where so supply products, which are where we commodity much which clear we situation, our whole very like I'm goes imagine at in the transparency more describing. company, a the is especially of this. could a the I application-specific from Given that have significantly In the quite certainly on that case more visibility, And very application bit are confident think you're has concern product which I you product. less are for what difficult. is asking serving, crystal

seasonal usual then Got And we we why even would you. year-on-year, stay just to industry? and not that sales, it. are Thank quarter line curious in why will follow-up, a stronger into Very down pattern of mobile mobile sales in kind subdued supposed that So QX? because And then with market? into to behaving that shipments are isn't mobile see sales my assume also you're be the for correctly, sequentially heard I'm QX helpful. seasonally for I be if

annually It supply do you're bit anyway right, down. really are has say, sequentially to of seasonal the pattern this in isn't also given little with much general, there year the constraints. and here situation. Yes. we specifically, Vivek, guiding a I'd yes, a But

to constraint hits for we which But supply three, nature. is in a some later just us have address know of products temporary the we market, it mobile just will that we on, so we this lose going, ship temporary share, a is, So any of momentum can quarter with any keep for our it's market us nature. a we want ship. socket which doesn't and good amount it this. so fully to The the we news cost don't We

If you the ban, annual I QX bit remind that mobile totally want benefited business also a do last quarter QX was since had bit quarter since actually because a special you of might quarter it in mobile our the was last comparison, in to a year it in more in Huawei three which four. before quarter stopped people than the

that's not the simple So background more.

very it. Got much. Thanks

you. Thank

comes question next line line from Research. Bernstein Stacy Ragson the from the of Your from

Your line is open.

my Hi, taking Thanks for guys. questions.

those content in increase content-specific you in to quarter versus growth you do being And near-term? guess, auto. you're your business end I driven much the much us I once the lift just mean, one like of question, being the wanted how things. drivers, which tell by content by driver do first market double-click unit because a you increase on out I EVs Can in the biggest auto of my higher selling specifically. today? of is you've again the is driven next For called guess, content how I into EV think of vehicles? think couple is

exposure. xEVs battery clearly which solutions in is Stacy, the Yes. fantastic for revenue management a our general, in driver growth have key

would XX% Investor management I And least, trend CAGR over here solutions. told you the of more Teach-In, with are, years. in than not we next can have that battery track our we if on I think that at absolutely reconfirm we couple that in

more little of xEVs. to and strongly a because is it content products take bit our you microcontrollers lot wider, increased actually very if Now other exposed also a are it the of

that it shows question, the the go a little Investor gives on take to for to parse XX more bit more But Day, We Jeff silicon of has content it detailed benefit double a just that how our will particular overall, on versus way more a bit a detail granted also which a just up. NXP. significant conventional November highlighted, in Stacy, in actually this xEV drivetrain in

we of higher which growth here. are rate is strong xEVs, push for our from significantly story a benefiting content So a

you. Thank it. Got

about For I the want ask returns. my follow-up, to cash

a So stock. you've back lot bought of

I buyback. think as of March, you upped the

something had $X.X and like in like $X.X billion You right authorization through billion now. you're

but you're still down. whole guiding share counts almost you're So through the authorization,

expect we have that you're confidence do shows even through stock so buyback that you're should the Are I guess, it the date? the what even now? next I return long since more the exists, to the mostly buyback So rest right year? you XXX% just bit that seems you I talking return expect going about this like a back strength And of we you're it suggests? year. I as than why suppose to more it But guess, guess, the more? And I about picture, growth guess, reinforces in talk cash buying year much as little go -- through we of given can you it

I'll maybe take -- So that, Kurt.

terms to of of question answer going. a where is there company in your So I guess, or the is, confidence lot we the have second third

moment good think buying we our a at clearly, So the is stock investment.

simple. our In terms quite much, it along, really We've XX level. months said net at how times of all we'll X is EBITDA debt trailing keep to

debt. this result do for future. that We're So that's that in that and what net us back the all level more than results buy year, And to X just be But times -- to XXX% if it's in us we'll that the is. results we'd pretty buying foreseeable mathematical. honest, returning continue the to at if time, staying

you, guys. That's helpful. it. Thank Got

next Your Deutsche question Bank. from from the Ross Seymore Instructions] comes [Operator of line

open. is Your line

at having on on sector of you're that for any I are Are have seeing in question of the Kurt has with Did million road a just-in-time? is Thanks the just-in-time to far catch highlighting I guys. of the and conversations you one don't That's them adopted of going seemingly this the side for be all follow-up, bold. question anything longer maybe the in automotive where have just for And up -- all? you auto you? think you customers their reactive or The Hi, structural clarification. on is the down can couple you changes that or letting that as years movement out the shipped all shortages Texas? change and guys question. the have a demand recently. term backfired is, bit then had the industry practices I short-term one basically you as guess ask then $XX change so me behavior a velocity really the But if of and clarification

Yes. Thanks, Ross.

one, talked indeed about the storm running quarter you remember lost two given is both $XXX our that million, I factories I completely. On which and that the revenue correct. I up tell winter think are What indeed we the is second facilities, Texas for first can we in

that, we place. in levels already which So output so the firing again. higher are both in the have to up the on to first pre-storm wished have with we factories, all And and cylinders would output have we

and good steady old significant a supply were a forward, as is mean, both news, good but which automotive these from products. discussed infrastructure revenue because news waiting a to I the we effect, for it perspective not But it's earlier perspective since comms is this output. factories going a had also that steady. badly exposure, from it's So is market one-time

who record in to we our glad operations restored have So thankful employees are time. and

you semiconductors there compatible between just-in-time I customers. signs see also structural six manufacturing time some one to especially pieces two a is and auto don't of And sort the in of are to totally of think half a cycle have the is in if indeed the question, auto, other your of the to going the this. change Ross, it. The buffer behavior On a in be system that three which of dealing not realizing with with months is I

So inventory think going a more is some the of extended I be to supply in chain this. result

this this it the I at is but it's planning you in because a point, this when for My ask supply are is some answer But point implemented? is is change. to time, no, can't they going Now just mean, yet. structural think people at there. being implement eventually be but not me, I this

from the the The transparency directly first we companies. other actually one car get which the is --

earlier, run application mentioned As what volume. in which about I so what never had which year will clarity model much in at we've product

been making this not much collaboration and are better to also wasn't to significant change, past. a case structurally think binding moving in more it the the structural mid that And is that's I only long-term because closer binding providing it much basis that be one car has also on So going we forecast, a that companies. is just than a with in becoming the so much, ever with because forecasts, but a the

will forecast to binding help our the on also plan more a So capacities foresee and end. with right

Peter. Kurt. quickly Thanks for for that you color, One

of on margin great the side gross gave color You things.

looks relative like getting to about it think Another target a foresee the the might to ranges XX.X%. OpEx know little anywhere kind how have it of year Analyst you OpEx But the this talk within bit is higher think leverage and you but growth? of target end we and XX%, intensity, just Do be some the or you there? between guys you're of that you that your last of of leverage lower later should range, potential XX% that I to end given at updating this historically XX% kind revenue range can think generally as running I just Meeting, year. I

increased some marketing, we'd typically think sales SG&A for is plan moment, and on. the think of to good XX% moment, revenue, to number for But XX% the because certainly for Certainly for dollars. although a the G&A, flattened X% XX% in hold number I more and I'd leverage SG&A. There's likely we R&D of probably

you. Thank

Thank you.

of the Suisse. from question Pitzer line next Credit from John comes Your

open. is line Your

how with Huawei walk for quarter think morning, wins of Kurt, in you be seems just of temper to the that know cycle Congratulations but us good is than ban, the could results. Thanks through question. the it given the guys. came were wanted might for the especially Can business? what solid Good which that some it's guide going the a the you business won ask ban, you you to there, better design think. levered like on bit ask me that excited but and very the some I kind I clearly had of kind than about expectations by driving guys be nicely you've letting growth, much had XG more margin your comm infrastructure pre the Yes. to quarter. grow September in little in June

Yes.

So large Chinese John, last talk fall did the win year indeed, did apart. which we around about significant design customer traction

in now to just had So guide not performing quarter this some in sub-segments build-outs, of related next The product which this business design the revenue actually which the we across is segment. last we does to and include I about for is outperformance is second It want indeed, the but across which are it's clear, talked this which be year. still win quarter all not just the the segment. the of is XG there.

XG, XG. So but is it not does it only include

the think you I'd third in then comms say, nice guidance the if Now yes infra, for about indeed. quarter

around think last anticipated discussed on I'd had a say, U.S. grow. anticipated two these modules the we the the see are As do ramps multi-technology trends We letting and calls, we I actually XG in number for us which see, of

range So tenders, rural nitride actually that base LDMOS Arizona, products it's new the in our but the are and nicely included from are which are our also macro gallium multi-technology gigahertz. and the means X.X new stations in facility technology which -- in those China sub nitride, we for both gallium frequency areas,

and capability XXX to is think LDMOS megahertz leadership. fit X.X I between somewhere gigahertz and just which perfect our So

nicely CPX a U.S. those John, it XG about when you go-forward QX beyond, modules for multi-technology So is which and The our tenders growth. indeed from are basis two, and in driving China. those think

a capacity. you prepared And of color, end to front outsourced high good really back in comments That's end Peter, class Is your expect talked the problem Kurt. about mostly and with needing both several you to up partners, to capital CapEx how more hit to catch we demand? the so a try make think over hit or supply about than quarters as continue working do next it's CapEx done then, being that of

about year. this CapEx X% will be

actual So lot our assembly up tests bottleneck Mainly, yes, there, QX going in in step and a fabs. also but it QX. a and of will in busting some bit there's

comments finished I see bit as we I the time -- So a up. foundries had have is received. towards be we we low. which really. material capital quarter We from from if work fast as the don't goods around get mean, it, that and But I of do get inventory raw it's more progress we working definitely like any build, CapEx the in up going being at the it. to tend we end more will shipments an all-time could

stepping to supply in we capacity on and we're other additional next positive customers. us work year, to So I internal suppliers build will guess, that and them. fast we back, our more just as hard it But as with very we a get definitely impact and investing it have from ship to get continue it,

see really don't anything I anything like getting anytime So to soon. inventory normal levels back our

Perfect. Thanks, guys, and congratulations.

next from comes line of the from Truist Your question Stein William Securities.

open. Your line is

Great. you breakout business. sort Thanks wondering remind on comm especially can and add clarification, infrastructure very congratulations my as I'm for within if my I'll of us the questions, strong. the taking the a guide,

digital in there us ID well. the to there's power I I about I over there you time? amplifiers, as business of RF but how those you is still maybe think think to pieces the grow this and think all know some we and of or expect remind as card networking tend split Can largely three

for about infrastructure, some indeed said, your business in subset congrats secure you for card networking on it there. So hi, is is The the and Thanks there also digital RF as is the Will. guidance. power

between can all break I across We I the mentioned not earlier, was them, quarter of what outperformance think out I the it the and details Will. say, in second will But them.

it the the these When quarter, across all XG-related the is to growth but guide limited RF of third of wasn't So power. think about probably by you less and the them. sub-segments, actually into infra comms was it one it

can Thanks I and the years of product for for product this in there, update some And growth and perhaps, ultra seeing you provide in for can one or wondering ago, that Thank those talking sort your category started handsets and that. And when, if forget anticipated question. revenue markets the one products terms the more you automotive. two end today? two wideband if outlooks about in you of traction them I'm you. I

element play. solutions software track, Yes. and do This that it's mobile everybody complete about for Happy remind ecosystem this product, because the so, just radio, to to nicely offer IoT. not indeed, we secure across really just it's and There Will. a on is automotive, the

those with $XXX much we what million on segments some across Will, very $XXX to track, I are 'XX. to said the Teach-In We at revenue have million in think

two from only years in So now.

As happening actually we of is speak. today, I'd say, as mobile

think as is I'd because have a about to world, you happening. the is using all place just companies, we in use needs your the working car phones to phone mobile If of closely. say, the firstly, case Android and a closely with mobile the Android major key following, now function obviously be this Automotive that of now very are was automotive

market with to is company the in a in certainty out on ultra say is be an car second high next dare implementation of and NXP. will year. working degree any relatively and there, And cars working first the which So I'd this with the half wideband of that year in

here. positively exposed and are very we So highly

Finally, we also IoT see first with a good implementations. traction

examples lost. we for for those the help wins There door techs of it. stuff, your properties, which phone nice early -- front home to it One But locks unlock door see you have and you also would which you also use in to then are open example. find mobile your might design

think years the next had this revenue now, and XX% million to from in some So is Again, million the growing market numbers size over $XXX we we Will. were couple very of given much for track, $XXX which two at for the NXP on years.

Great. Thank you.

you. Thank

from Your Sachs. next of Toshiya question Goldman comes line the from Hari the

open. is line Your

had the Thanks partners embeds to ability but for as versus to How Peter. your or much balance forward? you those read inflation morning. a well? elaborate Hi, signed alluded forward. as perhaps price could for wanted was with going hoping from I guess so -- one about XX% just guys about wanted you good that the that taking the of LTSAs And you Kurt forward? cost for is that well foundry higher dynamics, the on think Peter price you've number you. between some increases going bit I my to we clarify foundries to little Thank We already going sign or you're looking the should question. I

I'll a want we yes, Peter upfront increases. is But make input Yes, but this let not important. one on pass us tool rising. is And the I to is it really -- is increase that's for artificially answer, cost this margins. -- statement because to cost

come. a very our customers application-specific to large years and with trustful in relationship are for We

that's input color. to So we but the increase to cost more might want on increases, you structurally mechanism Peter, give margins. the more do here pass

Kurt. deeper build customers partners chain ours before, long-term customers two and bit which where really level raise of is is, suppliers, been I and who market Kurt and into pricing you are true the your understand you terms our have just And reduce without their a for think long-term our can in years both supply can sources past. little of will a of more when not to their lot it's in enabling ourselves answered out was there's it's predatory. it's company, who and supply for requirements on going kind than -- about come and are find been don't chains very the a them with big in the tight of us question and talking guys lots are a times we Yes, One, the of when better interesting a factors. who prices is supply But you built are profitability. and support are detail, our really you actually for and predictable relationships to tight. relationships What's and we about a really, we times are and commodity change this -- whole not who

Thank congrats. you, and

Thanks.

from Caso Chris of comes line next the question from Raymond Your James.

open. is line Your

equipment -- thank the Yes, year. expect second you and times question half up in that the CapEx do of to additions the on continue? for morning. the how you. Good was stepping also. How capacity the long that lead I A here imagine said extended you that are

you is, to order caught will up with -- be long some how the equipment to of now? get guess giving adding have right suppliers you visibility this. your on need in the into you demand So question capacity do continue I level

our the guess, to answer continue we will is in capacity healthy of simple is very need Well, foreseeable there for the we because product. a really cycle believe terms future I on going

understood So do. is really semiconductor out one industry, last thing the in of come everything core people they've are that's -- six the those outside to months really begun a we that for that understand semis part

grows the So that at next faster over a rate. probably you GDP few to the grow extent semiconductors years, will see

to assembly and remember to thing us, -- about the think I XX% is of test just with our XX% XX% capacity internal.

XX% So about that new have current. requirements, We're to will I of continue to them our likely have but to capital built a is supply fab, and equipment not external. of keep kind wafer there a of we source think updating the we're XX%, healthy constantly be

term So year longer in the below Analyst X% November. said, probably past it spend more X%. view to will the year We'll This at we've at X%. Day I cycle on a was through be think in we CapEx. the update it X% will Last

[Technical Difficulty]

breaking up. you're sorry, I'm

[Technical Difficulty]

I there. apologize. if hear I know I hear don't know, it could me, anything Kurt, what but he you I was don't couldn't said.

inventory? cost the of I had you guess, the something asking were same I problem. But about increased of

security take inventory more will not advance? more basically some -- Who I'm sorry. in ask the pay combination that who happened. The for pays that? Yes, the cost the just question sure of be that? the more as Will Will for is, supplies, of it hub? of inventory, the on that and bears I'm automakers cost as possession inventory be automakers of inventory the what

happen, any something be it extent is be let not I it's out it needs first, point us. to it Well, model. not won't business mean, me the to again, which of Once happens will there. capability their part because today

our maybe on Tier in X will it to So suppliers, not somewhere companies be distributors some auto cases, between but some have and end.

Got it. Thank you.

from the Your Curtis Blayne of next question comes from line Barclays.

is open. line Your

you're revisit to it for Thanks I the guys. wanted on on. squeezing just side, me Hey, just cadence that in. supply bringing the

-- kind one-off then to -- the the -- other growth to the in cadence of you you you're having re-prioritizing with are to will segments Is supply? you that you you're will you kind mentioned are to September with inventories guide able inventory Just a when bringing even them? for there quarter. prioritize out or in that September, mobile, ship So from of seeing that just match in. you're will that are a -- have you're away understand strong trying it And or you

continue is kind priority we to talked course, sought additional Blayne, And indeed, Well, suffering board. it. coming gradual mobile we and relatively from of the supply the different is about across The be certain board. the need third to many really constrained the is mean, online take everything of we across decisions, all quarter, sources. but time in I

We suppliers. with have increasing traction with and longer the mid contracts foundry term our

Texas up have now. by We fully running and

invested We expansions but have, some end looking to, into at also our alluded only not factories. Peter as both capability, of internal front testing, internal our

across the are things these of all and gradually. different happening products So technologies

is will one-time would it, tight remain But the mobile. strong it's continue it demand as one foresee indeed really we event. in I But say being not QX while. a to a with the suffering as for So

to maybe in model is content walk heavy. 'XX portion? years curious, year source but kind is on benefiting new want typically you don't the seasonality just seeing gains this the model obviously, remarks, to then you earlier? on just Just to September? maybe It seems about for did kind for seasonality, ask shift seasonality Are You're earlier? auto model through some business you of any that from but auto auto the mix kind a Just to maybe want you're that just you always it different content a One, think side. seeing Thanks. auto guide EV, -- now thoughts kind off year of obviously year? make kind And of of us like March of

revenue terms That's QX. to QX the one. we for Well, Blayne, total said business above absolute expect that be I in think I

inventories there because build many at this lows can't Secondly, point dealer in as to in as just the U.S. at are don't and really cars they I in China, is auto time wish they record seasonality in would think and build.

of would do in of function availability I what. think supply a it's when more they So terms

it them, So I at this seasonality. overwrites constrained is in which point any really time, for supply think

Thank you.

at There questions are this... no further

this running right? guess point, time, against I are At Jeff, we

Yes. Kurt. That's correct,

Yes.

I time, news we So could strong the board. with maybe capability revenue let the which end saying, give supply guidance you that then drives me very quarter conclude good we call view are from perspective. are transparency a seeing at the across same hope my the the continued into demand strong a online, and third And the coming into from seeing increased the we which

which year. the same We be quarter higher see this to for time, Thank mark, the at the much also With for had we we time. going four told hitting and yet see to anticipated margins that long are you that thank going quarter your than is our continue now that, we a gross you. you three, trend into today. very next And attendance I

concludes today's all. Thank This you, our participating. for conference Thank you call.

disconnect. now may You