Gary Mobley

Gary Mobley from Loop Capital Markets asked about the sequential decline in RPOs, the seasonality of bookings for the current and general fiscal year, renewal activity in EDA and simulation software, and the product cycle strength of ZeBu and HAPS-200 hardware.

Answer

Shelagh Glaser, CFO, stated that the $11.3 billion backlog provides strong confidence, and RPOs naturally ebb and flow with renewal timing. Sassine Ghazi, President and CEO, highlighted the strength of the hardware portfolio (ZeBu, HAPS, EP family), noting record years and an expectation for continued strong performance driven by customer demand and complexity.

Gary Mobley from Loop Capital Markets asked about the sequential decline in Remaining Performance Obligations (RPOs), the seasonality of bookings, renewal activity for EDA and simulation software, and the product cycle strength of ZeBu and HAPS-200 hardware.

Answer

CFO Shelagh Glaser explained that RPOs naturally ebb and flow with renewal timing, expressing confidence in the $11.3 billion backlog. President and CEO Sassine Ghazi highlighted the continued strong demand and complexity driving the ZeBu, HAPS, and EP systems, expecting continued record performance for the hardware portfolio due to technology differentiation.

Gary Mobley from Loop Capital asked about the pricing benefits and cost implications of shifting EDA tools to GPU-based computing. He also inquired about potential supply chain constraints for the Zebu and HAPS 200 hardware systems in the second half of the year.

Answer

CEO Sassine Ghazi explained that GPU acceleration delivers a multiple-factor speedup, allowing for value-based pricing that reflects the customer's total cost of ownership savings. CFO Shelagh Glaser confirmed that there are no supply chain constraints for hardware and that the supply situation is expected to improve in Q4, which is factored into the company's second-half guidance.

Gary Mobley from Loop Capital inquired about the pricing benefits and cost implications of shifting more EDA tools to GPU-based computing. He also asked about potential supply chain constraints for the Zebu and HAPS 200 hardware systems in the second half of the year.

Answer

CEO Sassine Ghazi explained that GPU acceleration provides significant speedups, allowing for value-based pricing tied to the customer's total cost of ownership benefit. CFO Shelagh Glaser stated that there are no supply chain constraints for its hardware systems and that supply is expected to improve in Q4, supporting the company's back-half weighted revenue plan.

Gary Mobley asked about the significant operating margin expansion guided for FY25 despite slower projected revenue growth, questioning if it was mainly due to reduced M&A activity ahead of the Ansys deal. He also sought clarification on whether the FY23 ending backlog of $8.1 billion was adjusted for the Software Integrity divestiture.

Answer

CFO Shelagh Glaser attributed the 150 basis points of guided operating margin expansion to a multiyear focus on driving internal efficiencies across R&D and digital transformation, rather than just a pause in M&A. She noted this operational discipline will be applied to the Ansys integration. Glaser also confirmed that the prior-year backlog figure of $8.1 billion was indeed adjusted for the divestiture of the Software Integrity business.

Gary Mobley asked about the impact of moving System Design and Analysis (SDA) customers to one-year license terms on 2025 growth, the considerations for 2026, and how this transition might affect the revenue contribution from the Hexagon acquisition.

Answer

Senior Vice President and CFO John Wall confirmed that SDA faced tough comps in Q4 2025 due to multi-year business in Q4 2024 and a deliberate shift to annual subscriptions for Beta, impacting year-over-year numbers. He stated that SDA's strategic trajectory and role in the chip-to-systems thesis are strong, with SDA being 16% of revenue in 2025, consistent with 2024. Wall clarified that the Hexagon acquisition, with an annualized revenue of about $200 million, is not included in the current 2026 guidance, and its revenue contribution would depend on deal closure timing.

Gary Mobley asked about the impact of moving SDA customers to one-year license terms on growth in 2025, the considerations for 2026, and how the Hexagon acquisition's revenue might be affected by this transition.

Answer

SVP and CFO John Wall confirmed that SDA's 2025 growth was impacted by tough Q4 2024 comparisons and a deliberate shift to more annual subscription arrangements for Beta. He expressed satisfaction with SDA's strategic trajectory, noting it remained 16% of revenue in 2025 and is expected to grow in 2026. Wall clarified that Hexagon's annualized revenue is about $200 million, with an estimated $150 million for the year if the deal closes by Q1, but this is not included in the current 2026 guidance.

Gary Mobley sought clarification on the $600 million increase in backlog from Q2 ($6.4 billion) to Q3 ($7 billion), specifically asking how much of this delta was attributable to the inclusion of China backlog following the export control repeal.

Answer

President and CEO Anirudh Devgan clarified that approximately $150 million, or about 25%, of the $600 million backlog growth was a catch-up from Q2 to Q3 related to China. SVP and CFO John Wall confirmed this figure, stating the rest was due to broad-based business strength.

Gary Mobley sought clarification on the $600 million increase in backlog from $6.4 billion to $7 billion, specifically asking how much of this growth was attributable to the inclusion of China backlog after the export control repeal.

Answer

President and CEO Anirudh Devgan clarified that approximately 25%, or $150 million, of the $600 million backlog growth was a catch-up from Q2 to Q3 related to China, with the remaining portion representing broad-based growth across the business.

Gary Mobley from Loop Capital asked about the strong first-half bookings, their implication for the second half, and whether the Q2 backlog figure excluded China.

Answer

SVP & CFO John Wall confirmed that the Q2-ending backlog excluded certain China bookings due to the restrictions in place at the time. He expressed high confidence that Cadence will end the year with a record-level backlog and a book-to-bill ratio greater than one, driven by a strong renewal cycle in Q3 and Q4.

Gary Mobley asked how the increasing use of GPU-based servers for running EDA tools like simulation and synthesis impacts Cadence's licensing model and its annual contract value (ACV).

Answer

CEO Anirudh Devgan described their strategy of running software on a rich hardware set including CPUs, GPUs, and their own Palladium processors. He confirmed that while the traditional subscription licensing model remains, Cadence is increasingly offering cloud solutions that package hardware and software together. This presents a new SaaS-like business model for customers.

Gary Mobley of Loop Capital Markets asked about the 2025 operating expense cadence, noting that the operating margin guidance implied a different quarterly progression than the revenue split.

Answer

CFO John Wall explained that the company changed its employee merit cycle from July to January, starting in 2025. This change eliminates the previous pattern of a margin drop from Q2 to Q3. Consequently, the profitability profile for 2025 is now expected to improve sequentially throughout the year.

Gary Mobley inquired about the record level of design wins (measured in lifetime value) in Q4 and fiscal year 2025, and the revenue growth rate these wins support. He also asked about the wider revenue bracket in the Q1 guidance.

Answer

Ford Tamer (CEO, Lattice Semiconductor) confirmed continued record design wins in Q4, setting up multi-year growth supporting at least a 25% growth rate. Lorenzo Flores (CFO, Lattice Semiconductor) attributed the wider guidance range to the quantitative effect of higher revenue and different potential scenarios for customer delivery timing, expressing comfort with the midpoint.

Gary Mobley asked about the lifetime value of design wins in Q4 and for the full fiscal year 2025, and what revenue growth rate these design wins are expected to support. He also inquired about the wider revenue guidance bracket for Q1 2026 ($14 million vs. the usual $10 million) and the factors contributing to the lower versus higher end of the range.

Answer

CEO Ford Tamer confirmed continued record design wins in Q4, setting up multi-year growth supporting at least 25% growth. CFO Lorenzo Flores explained that the wider revenue bracket is due to the higher revenue base (maintaining a similar percentage band) and different potential scenarios for customer delivery timing within the quarter, expressing comfort with the midpoint.

Gary Mobley of Loop Capital asked about the magnitude of undershipping in the industrial and automotive segment within the Q3 guide and whether there were any supply constraints in communications and compute. He also questioned the strategy to reach the long-term OpEx target of 30% of revenue.

Answer

CFO Lorenzo Flores stated the undershipment amount was similar to Q2 and would continue until year-end, and confirmed they are seeing turns business in comms and compute. Regarding OpEx, Flores called the 30% target the 'right objective' for the long term but did not provide a specific timeline, emphasizing that current spending is an investment in future growth.

Gary Mobley asked about the path to achieving the long-term gross margin target of low 70s, considering factors like product mix, a potential snapback in legacy products, and IP revenue. He also inquired about the competitive landscape in the low-power, small-sized FPGA market.

Answer

CEO Fouad Tamer expressed confidence in achieving the 70% long-term gross margin target, noting the company has sustained that level for 10 quarters, which demonstrates product value. CFO Lorenzo A. Flores added that margin expansion will be aided by revenue scaling and a favorable mix from new products. On competition, Tamer asserted that Lattice's Lot 4 architecture provides a sustainable power and size advantage in small and mid-range FPGAs against competitors' Lot 6 architectures.

Gary Mobley asked about the path to achieving the low 70% gross margin target and about the competitive landscape in low-power FPGAs, given increased focus from larger competitors.

Answer

CEO Fouad Tamer noted that gross margin has held near 70% for 10 quarters, demonstrating product value. CFO Lorenzo A. Flores added that margin expansion will be aided by revenue scale and a favorable mix from new products. On competition, Tamer asserted that Lattice's Lot 4 architecture provides a sustainable power and size advantage in the small and mid-range segment that competitors with Lot 6 architectures cannot easily replicate.

Gary Mobley inquired about ON Semiconductor's GaN manufacturing strategy, specifically for vertical GaN (in-house) and lateral GaN (partnerships), and whether the product portfolio is sufficiently rebuilt across the voltage spectrum.

Answer

CEO Hassane El-Khoury confirmed two manufacturing partnerships for lateral GaN switches (Innoscience and GlobalFoundries), which are combined with in-house Treo for control and drive. He stated that this strategy provides a complete portfolio covering 40V through 1200V, including native 1200V GaN-on-GaN devices, meeting market needs.

Gary Mobley asked for more specifics on forward-looking revenue key performance indicators (KPIs), such as beginning-of-quarter backlog, customer expedites, and overall changes in revenue visibility. He also questioned if ON Semiconductor has sufficiently invested in its GaN product portfolio, particularly regarding vertical and lateral GaN manufacturing strategies.

Answer

President and CEO Hassane El-Khoury confirmed improved visibility, citing an upward trend in book-to-bill, less turns revenue needed, and more expedites, indicating market stabilization. Regarding GaN, he affirmed that the portfolio is complete across the 40-1200 volt range, including native 1200-volt GaN-on-GaN devices and integrated solutions with in-house Treo drivers. He mentioned foundry partnerships with Innoscience and GlobalFoundries for lateral GaN switches.

Gary Mobley asked for an update on the revenue headwind from exiting nine core businesses, specifically confirming the previously communicated figures of $200 million for the current fiscal year and $300 million for the next. He also inquired about the potential impact of a major analog player raising prices on the broader pricing environment for the upcoming calendar year.

Answer

Hassane El-Khoury, President, CEO, and Director, ON Semiconductor, confirmed no change to the revenue headwind outlook, stating that $45 million was exited in Q3, with approximately $55 million remaining for Q4, and about 5% of 2025 revenue not repeating in 2026. Thad Trent, CFO, ON Semiconductor, stated that the company expects normal pricing behavior and is not anticipating any significant pricing changes in 2026 due to other companies' actions, suggesting any such changes would be considered upside.

Gary Mobley sought an update on the revenue headwind from exiting nine core businesses, specifically the $200 million for 2025 and $300 million for 2026, and the potential impact of a 'big analog player' raising prices on the pricing environment for the next calendar year.

Answer

Hassane El-Khoury, President and CEO, confirmed no change to the outlook, with $45 million of non-core exits in Q3 and an expected $55 million in Q4, leading to about 5% of 2025 revenue not repeating in 2026. Regarding pricing, Hassane anticipates normal behavior, is monitoring the situation, and views any potential price increases as upside.

Gary Mobley asked for the expected revenue headwind from non-core business exits in fiscal 2025 and whether the impact is linear. He also requested an update on the operational status and ramp of the East Fishkill facility.

Answer

CFO Thad Trent specified that the headwind from business exits in 2025 is expected to be approximately $200 million, with $100 million already realized year-to-date. President and CEO Hassane El-Khoury reported that the East Fishkill fab is qualified and running, with silicon power products shipping, image sensor qualification on track, and over 5 million units of Trejo products already shipped from the facility. Its margin impact is tied to overall network utilization.

Gary Mobley requested more context on the 50% win rate for silicon carbide (SiC) models at the Shanghai Auto Show, asking about market share and whether pricing concessions were made to compete with Chinese suppliers.

Answer

CEO Hassane El-Khoury clarified that the wins are based on superior performance and system-level cost savings, not price concessions. He emphasized that onsemi's primary competition in China for high-performance SiC is its global peers, not local suppliers, due to a significant technology lead, which is being extended with next-generation trench-based products.

Gary Mobley of Loop Capital inquired about pricing trends for core products following annual negotiations and asked for an update on the company's silicon carbide wafer sourcing strategy, particularly the mix between internal and external supply.

Answer

CEO Hassane El-Khoury stated that the company is not seeing traditional annual price reductions. Instead, it shares efficiency gains from its Fab Right strategy with customers, which is beneficial for both parties' margins, rather than cutting prices without an increase in demand. On wafer sourcing, he confirmed onsemi uses a flexible mix of internal and external supply, has qualified 200-millimeter wafers, and will continue to refine the mix based on factors including the geopolitical environment.

Gary Mobley asked about the drivers behind MPS's market outperformance in 2025, including share gains, data converters, or modules, and requested KPIs for module mix. He also inquired if the increased visibility suggests a more linear 2026 revenue trajectory, less dependent on the second half.

Answer

Bernie Blegen, EVP and CFO, attributed the 26% company growth in 2025, despite a 2% decline in enterprise data, to MPS's differentiated technology and services across all end markets, reflecting execution and quick adaptation. He stated that the first half of 2026 for enterprise data and the company is more secure due to positive Q4 ordering patterns, but variables for the second half trajectory remain. Michael Hsing, CEO and Founder, added that close collaboration with large data center customers provides good lead times and forecasts, enabling MPS to meet demand.

Gary Mobley asked about the drivers behind MPS's consistent market outperformance in 2025, inquiring if it was due to share gains in voltage regulators, expansion into data converters, or higher content from modules, and requested KPIs for module mix. He also asked if increased visibility suggests a more linear 2026, less dependent on the second half.

Answer

Bernie Blegen, EVP and CFO, attributed 2025's 26% growth (despite a 2% decline in enterprise data) to MPS's differentiated strategy of offering best technology and services across all end markets, and its ability to adapt quickly. He stated that the first half of 2026 for enterprise data and the company is more secure due to positive ordering patterns, but the second half trajectory still has variables. He acknowledged the high-level issue of distinguishing real demand from potential double ordering.

Gary Mobley of Loop Capital asked for confirmation on whether bookings continue to improve sequentially, given MPS's 3-4 months of visibility and quick-turn business model. He also inquired about seasonal considerations for the first quarter. Additionally, he asked about the trend of distribution inventory for the September quarter, noting it was at the low end of the 5-8 week target and decreased in the June quarter, and when it might return to the mid to upper part of that normal range.

Answer

Michael Hsing, CEO and Founder, stated that predicting bookings is difficult, and MPS builds inventory below models to anticipate and adapt swiftly. Bernie Blegen, EVP and CFO, added that they lack significant visibility into the first half of next year, though enterprise data and automotive are well-positioned for new revenue ramps, the timing and balance for Q1 remain unclear. Regarding distribution inventory, Bernie Blegen reported that Q3 channel inventory was unchanged in terms of days from the prior quarter, indicating that MPS is satisfying real demand, which reflects their quick-turn business model.

Gary Mobley asked if bookings continued to improve sequentially and for insights into seasonal considerations for Q1 2026. He also inquired about the distribution inventory trend in Q3 2025 and when MPS might increase it to the mid-to-upper part of its target range.

Answer

Michael Hsing (CEO and Founder) and Bernie Blegen (EVP and CFO) stated that predicting bookings is difficult, and they have limited visibility into the first half of 2026, despite strong positioning for new revenue ramps in enterprise data and automotive. Bernie Blegen reported that Q3 channel inventory remained unchanged in terms of days from the prior quarter, indicating that MPS is satisfying real demand through its quick-turn business model.

Gary Mobley asked about the seasonality expectations for the fourth quarter compared to historical trends. He also inquired about MPS's total annual revenue capacity and whether the book-to-bill ratio was trending above parity.

Answer

Founder, Chairman, President & CEO Michael Hsing and EVP & CFO Bernie Blegen stated that historical seasonality is no longer a reliable guide, suggesting a 'flattish' outlook for Q4 is most appropriate. Blegen confirmed capacity supports $4 billion in revenue and noted that the ordering pattern is short-term, so the book-to-bill is not building a large, long-term backlog. Hsing added that inventory is low but they can meet Q4 demand.

Gary Mobley asked about the scale of MPS's business in China for local consumption and its competitive positioning due to its 'China for China' manufacturing strategy. He also inquired about customer order lead times and inventory levels.

Answer

CEO Michael R. Hsing explained the company's long-term strategy of diversifying manufacturing, resulting in a balanced global footprint that serves China from within and the U.S. from outside China. On inventory, CFO Bernie Blegen stated that both company and channel inventory are lean and below their target model, with lead times holding steady. Hsing added that MPS's strategy is to hold more inventory internally to better manage new product ramps.

Gary Mobley asked if there were any greater than 10% customers in fiscal year 2024 and inquired about the potential revenue scale of diversification efforts like data converters, silicon carbide, and DSP audio by the 2026 timeframe.

Answer

EVP and CFO Bernie Blegen confirmed that for the full year, MPS had two direct customers (distributors) and one indirect customer that were each greater than 10% of revenue, but declined to provide specific percentages ahead of the 10-K filing. Regarding new markets, CEO Michael Hsing stated that these are multi-billion dollar opportunities for MPS but declined to put a specific timeline on them, suggesting the company's historical growth model is a good reference. Bernie Blegen added that the company continues to 'plant a lot of seeds' in different areas.

Gary Mobley asked about SiTime's supply chain, specifically if there are any capacity constraints or extended lead times, and whether SiTime is benefiting from potential struggles among crystal-based competitors. He also sought details on the acquisition, including whether it's a fabless business model, any foundry crossover, and the location of the engineering team.

Answer

Rajesh Vashist, CEO, stated that SiTime is not aware of crystal suppliers struggling and relies on its own strengths, including programmability, supply chain integrity, quality, reliability, and support, which allow it to charge a premium. He expressed confidence in the supply chain, having caught up after early-year challenges. Beth Howe, CFO, added that they work closely with supply chain partners to secure supply and manage costs. Rajesh Vashist confirmed the acquired business is a good match for SiTime's fabless model, utilizing TSMC 0.18 micron and GlobalFoundries 55nm, with strong back-end connections. The engineering team is primarily located in North America (Ottawa, South San Jose, Tempe, Arizona), with some presence in Shanghai and other parts of Asia.

Gary Mobley asked about SiTime's ability to support strong growth from a supply chain perspective, inquiring about capacity constraints, extended lead times, and whether SiTime is benefiting from struggles among crystal-based competitors. He also sought confirmation on the Renesas timing business being a fabless model, foundry crossover, and the location of the acquired engineering team.

Answer

Rajesh Vashist, CEO of SiTime, stated they have no data indicating crystal suppliers are struggling and rely on SiTime's strengths (programmability, supply chain integrity, quality, reliability, support). He expressed confidence in their supply chain, having caught up after early-year challenges. Beth Howe, CFO, added they work closely with partners to secure supply and manage costs. Mr. Vashist confirmed the engineering team is mostly in North America (Ottawa, South San Jose, Tempe, Arizona) with some in Shanghai, and that it's a fabless model with good foundry matches (TSMC 0.18 micron, GlobalFoundries 55 nanometer) and back-end partners.

Gary Mobley asked if Skyworks still stands behind the revenue forecasts outlined in its S-4 filing through 2030, given that the filing predates the down selection with its largest customer for the next-generation launch.

Answer

CEO Philip Brace stated that he could not specifically comment on past filings but reiterated his strong bullishness on the Qorvo combination, believing in its strategic and financial benefits, and reaffirmed Skyworks' commitment to closing the transaction.

Gary Mobley referenced Skyworks' S-4 filing from early December, which included revenue forecasts through 2030, and asked if the company still stands behind its 2026 and 2027 revenue forecasts given recent updates on content with its largest customer.

Answer

CEO and President Philip Brace stated that it is difficult to comment on specific past filings but reiterated his strong bullishness on the Qorvo combination, emphasizing belief in its strategic and financial benefits and commitment to closing the transaction.

Gary Mobley asked about CEO Phil Brace's priorities, specifically regarding the business with its leading smartphone customer, and also inquired about current factory utilization rates and optimization goals.

Answer

CEO Philip Brace emphasized a renewed focus on execution, stating the company must 'deliver better parts, period' to win in the competitive mobile market. CFO Kris Sennesael added that while utilization varies, they have plenty of capacity, and future revenue growth will improve margins without significant CapEx. He also confirmed their view on blended content in the next phone launch has not changed.

Gary Mobley sought clarification on NXP's statement about operating within its long-term operating model for 2026, specifically whether it refers to the 6-10% revenue growth rate or the 2027 revenue destination. He also asked about the impact of the MEMS sensor business sale on the expense side, including gross margin and OpEx.

Answer

Jeff Palmer, VP of Investor Relations, stated that the long-term model laid out at Analyst Day is intact, and NXP expects to accelerate through the next two years after the H1 2025 inventory digestion. Bill Betz, CFO, explained that the MEMS sensor business sale involved about 100 people and had a minor gross margin impact (10-20 basis points improvement) as it was below corporate margins. Rafael Sotomayor, President and CEO, added that corporate restructuring was undertaken to accommodate new headcount from recent acquisitions. Bill Betz also noted that divesting the business helps prevent future gross margin headwinds.

Gary Mobley followed up by asking about the impact of the MEMS sensor business sale on the expense side, specifically on gross margin and OpEx.

Answer

Bill Betz, CFO, stated that the sale involved approximately 100 people. The gross margin impact is minor, potentially a 10-20 basis point improvement, as the business was below corporate margins. Rafael Sotomayor, President and CEO, added that corporate restructuring was undertaken to make room for new headcount from acquisitions. Bill Betz also noted that the divestiture prevents future gross margin headwinds.

Gary Mobley asked about potential reputational harm from the supply chain issue, its impact on companion chips versus RCDs, the speed of Q2 revenue recovery, and the material revenue contribution from MRDIMM by year-end.

Answer

Luc Seraphin (CEO, Rambus) confirmed no reputational harm, stating the issue only affected older RCD versions, not companion chips. Desmond Lynch (CFO, Rambus) assured that inventory would be replenished by the end of Q1 to support Q2 demand. Luc Seraphin reiterated that initial MRDIMM contribution is expected towards the very end of the year, with the main contribution in 2027, dependent on platform rollouts.

Gary Mobley (Loop Capital) asked about potential reputational harm from the supply chain issue, its impact on RCD versus companion chips, and the feasibility of a sharp Q2 revenue recovery to over $100 million in product revenue. He also inquired about material MRDIMM revenue contribution by the end of the calendar year.

Answer

CEO Luc Seraphin confirmed no reputational harm, citing quick identification and resolution of the issue, which only affected older RCD versions, not companion chips. CFO Desmond Lynch stated that inventory would be replenished by the end of Q1 to support Q2 demand. Luc Seraphin reiterated that initial MRDIMM contribution is expected towards the very end of 2026, with main contribution in 2027.

Gary Mobley asked about Rambus's supply chain considerations, including order lead times and potential TSMC constraints, and the market impact of high-capacity server DIMM/DRAM constraints due to HBM prioritization. He also questioned if Rambus's RCD market share, currently around 40%, has a natural cap in a three-supplier market, or if 45-50% is achievable.

Answer

Desmond Lynch (CFO, Rambus Inc.) confirmed careful monitoring of the supply situation, noting a $6 million inventory increase in Q3 to support Q4 growth and no significant customer inventory buildup. He highlighted Rambus's robust supply chain, strong relationships with manufacturing partners, and focus on non-leading-edge nodes. Luc Seraphin (CEO, Rambus Inc.) added that Rambus is historically agnostic to DRAM pricing and doesn't foresee it impacting product demand. Mr. Seraphin stated that Rambus, with early 40% DDR5 market share in 2024, expects to continue gaining share, citing 40% year-over-year product revenue growth against mid-to-high single-digit server market growth. He believes 40-50% is an objective, with room to grow given the DDR5 cycle's early stage and Rambus's complete chipset offering aiding interoperability.

Gary Mobley asked about Rambus's supply chain considerations, including any extended order lead times due to TSMC constraints and the impact of DRAM constraints (HBM prioritization) on high-capacity server DIMMs. He also questioned if there's a natural cap for Rambus's RCD market share, currently above 40%, given it's a three-supplier market, and if 45-50% share is on the horizon.

Answer

Desmond Lynch (CFO) stated Rambus is monitoring supply, grew inventory by $6 million in Q3 to support Q4, and observed no notable customer inventory buildup. He highlighted Rambus is not on leading-edge nodes for front-end manufacturing and maintains strong back-end relationships, anticipating a slight inventory increase in Q4 to support Q1 2026 demand. Luc Seraphin (CEO) confirmed Rambus's early 40% market share in DDR5 for 2024 and expects continued share growth, citing 40% year-over-year product revenue growth against mid-to-high single-digit server market growth. He aims for 40-50% share, seeing room for further gains as the DDR5 cycle is still early and Rambus's complete chipset offering aids with complexity.

Gary Mobley of Loop Capital asked about the PC market opportunity, seeking visibility on PMIC sales for upcoming platforms and current revenue from client clock drivers. He also questioned the company's lean inventory levels and whether lead times were extending.

Answer

CEO Luc Seraphin explained that client chipsets (clock drivers, PMICs) are seeing modest initial traction in the high-end PC market, with significant revenue contributions expected in 2026. CFO Desmond Lynch addressed inventory, stating that Q2 levels were around 120 days and sufficient to meet demand. Lynch noted that lead times remain at normal levels and the company is comfortable holding more strategic inventory going forward.

Gary Mobley asked about the key drivers for memory density in servers, such as socket configurations and core counts, and questioned the reversal in the relationship between ASC 606 GAAP revenue and adjusted revenue.

Answer

CEO Luc Seraphin explained that a combination of factors, including socket counts, channels per processor, and the AI server mix, is expected to drive mid-to-high single-digit market growth for Rambus's products. CFO Desmond Lynch clarified that a small patent agreement renewal led to upfront revenue recognition under ASC 606, causing GAAP revenue to exceed licensing billings for the quarter, but noted that major contracts are now aligned, improving convergence.

Gary Mobley asked for a response to competitor claims about a PMIC (power management IC) issue and sought details on the company's memory interface chip market share gains in 2024.

Answer

CEO Luc Seraphin clarified that a reported market issue is not with Rambus's PMIC and stated the situation reinforces the strategic value of its in-house PMIC development. He noted that Rambus's 10% product revenue growth in a mid-single-digit server market indicated share gains, estimating the company's DDR5 RCD share is now in the 'early 40%' range.

Gary Mobley of Loop Capital Markets questioned the market evolution of MRDIMM as a JEDEC standard and Rambus's potential market share. He also asked how much of the current revenue growth is due to server market recovery versus share gains, and the associated risk of an inventory rebuild.

Answer

CEO Luc Seraphin confirmed MRDIMM is a JEDEC standard and that Rambus aims for a market share similar to its RCD business, noting the content per module is at least 4x higher. He acknowledged the server market recovery but stated Rambus's product business is growing faster, indicating share gains. He also conveyed that current DDR5 inventory levels are considered reasonable and not a cause for concern.

Gary Mobley questioned Allegro MicroSystems' OpEx discipline, particularly how OpEx growth is expected to trend relative to sales growth in fiscal year 2027. He also asked about the lifetime value of design wins and the revenue growth supported by recent trends.

Answer

Derek D'Antilio, CFO, explained that recent OpEx increases were due to variable compensation and payroll tax resets. He expects OpEx to grow at an inflationary rate after Q4, with G&A remaining flat and reallocated to R&D. Mike Doogue, President and CEO, confirmed higher dollar values for design wins this year, supporting double-digit sales growth, with more details to be shared at the upcoming Analyst Day.

Gary Mobley inquired about OpEx discipline, specifically how OpEx growth is expected to trend relative to sales growth into fiscal year 2027, acknowledging the variable compensation in the current quarter. He also asked about the lifetime value of design wins and the type of revenue growth supported by trends over the last 12 months.

Answer

CFO Derek D'Antilio explained that the Q3 OpEx increase was primarily due to variable compensation, and the March quarter increase is from annual payroll tax resets. He expects OpEx to increase only at an inflationary rate after Q4, as the current OpEx structure is built to service over $1 billion in revenue, with G&A remaining flat for five years and reallocated to R&D. President and CEO Mike Doogue confirmed that Allegro tracks the lifetime value of design wins, noting higher dollar values this year, which supports double-digit sales growth. He indicated that more detailed data would be shared at the upcoming Analyst Day.

Gary Mobley asked if the Q2 revenue guidance reflects shipping to true end demand and whether Western OEM profit warnings have impacted design win activity.

Answer

CFO Derek D'Antilio clarified that the Q2 guide does not yet represent shipping to true end demand, which he estimates is higher at $220M-$230M, as channel inventory dynamics are still normalizing. CEO Michael Doogue stated he has seen no impact on design or RFQ activity from OEM tariff concerns, noting that any past program shifts were related to EV/ICE platform strategy, not tariffs.

Gary Mobley of Loop Capital Markets inquired about inventory levels in the distribution channel and at direct customers, and asked about the possibility of achieving a 50% gross margin within fiscal year 2026.

Answer

CFO Derek D'Antilio reported that distribution channel inventory was down 25% year-over-year, with the Q1 guidance accounting for regional normalization. Regarding gross margin, D'Antilio stated that reaching 50% is 'plausible' in the short term. He explained that the variable contribution margin could temporarily exceed the typical 65% as benefits from restructuring and negotiated cost reductions begin to positively impact the P&L.

Gary Mobley from Loop Capital Markets questioned management's view on S&P Mobility's 2025 light vehicle production forecast and Allegro's ability to outgrow it, while also inquiring about pricing trends with both customers and foundry partners.

Answer

CEO Vineet Nargolwala stated that Allegro can grow even without auto production growth due to rising content in xEV and ADAS, reaffirming the company's model of growing 7-10% above vehicle production. He described auto pricing as returning to a normal 2-3% annual reduction. CFO Derek D'Antilio added that Allegro is successfully negotiating wafer price reductions from foundries in exchange for volume commitments.

Gary Mobley asked for clarification on Qorvo's fiscal year 2027 guidance for Apple revenue being flat, specifically whether this implies a balance between volume growth and content decline, and what underlying iPhone unit volume assumptions are factored in. He also questioned the year-over-year decrease in the fourth-quarter revenue guide, asking how much is attributable to business divestments versus Android-related declines.

Answer

Bob Bruggeworth (CEO) stated that Qorvo would not comment on their largest customer's volumes, only their own revenue expectations based on current knowledge. Grant Brown (CFO) clarified that the vast majority of the Q4 year-over-year revenue decrease is Android-related, with a relatively small impact from divestitures, and noted that customer forecasts are being influenced by memory pricing concerns.

Gary Mobley sought clarification on Qorvo's fiscal year 2027 flat revenue guidance for its largest customer, asking if it implies volume growth offset by content decline, and inquired about the volume assumption for iPhone units. He also asked about the year-over-year revenue decrease in Q4, specifically the impact of business divestments versus Android-related declines.

Answer

CEO Bob Bruggeworth stated that Qorvo does not comment on customer volumes, only its own revenue expectations. CFO Grant Brown clarified that the vast majority of the Q4 year-over-year decrease is Android-related, with divestitures having a relatively small impact, and noted memory pricing concerns influencing customer forecasts.

Gary Mobley challenged the decision not to raise the full-year fiscal 2026 outlook despite a stronger first-half forecast, asking if it was due to conservatism or tariff concerns. He also asked about the practicality of separating the ACG business, questioning its manufacturing and R&D integration with HPA and CSG.

Answer

SVP & CFO Grant Brown cited the push-out of a CSG program, the second-half impact of exiting low-margin Android business, and general macro uncertainty as reasons for maintaining a cautious full-year view. On business structure, Brown explained the segments are "rather tightly coupled," sharing critical resources like process engineering and factories, including the main Oregon fab. President & CEO Robert Bruggeworth reinforced this point about the shared fab.

Gary Mobley asked if Qorvo is still comfortable with its outlook for double-digit growth in the HPA and CSG segments for fiscal '26 and sought confirmation on the quarterly OpEx run rate.

Answer

CEO Robert Bruggeworth confirmed the double-digit growth outlook for HPA and CSG. An executive (likely Eric Creviston, President of CSG) detailed CSG drivers, including the WiFi 6-to-7 transition and rapid growth in SoC businesses like UWB and Matter. CFO Grant Brown affirmed that a $250 million quarterly OpEx is a reasonable baseline, with minor potential fluctuations from seasonality or currency effects.

Gary Mobley of Wells Fargo Securities asked for verification of Qorvo's Android revenue forecast, which projects an initial $875 million base declining over the next few years. He also inquired about the sustainability of the strong quarterly performance in the High-Performance Analog (HPA) segment, particularly within the defense business.

Answer

CEO Bob Bruggeworth confirmed the $875 million Android revenue figure and the projected annual decline of $150-$200 million, primarily from China and some Samsung mid-tier business. Bruggeworth and CFO Grant Brown explained that the defense business is highly seasonal, with a strong second half of the fiscal year. They anticipate even stronger defense revenue in the March quarter, followed by a significant seasonal decline in the June quarter, while maintaining a double-digit growth outlook for the full year.

Gary Mobley inquired about Cirrus Logic's largest customer concentration for fiscal year 2025, whether there was any evidence of demand pull-forward ahead of potential tariffs, and for a progress update on the company's traction in the PC market.

Answer

CEO John Forsyth confirmed the largest customer represented 89% of FY25 revenue. He stated that while there may have been very limited, immaterial pull-ins ahead of tariff announcements, there were no clear signs of a material impact. Regarding the PC business, he noted revenue was in the low tens of millions for FY25, as expected, and is projected to double in FY26 as the company ships in over 150 different laptop SKUs.

Gary Mobley asked how new smartphone form factors like foldables might affect Cirrus's content and inquired about the significance of a recent Android win and the broader opportunity in that market.

Answer

CEO John Forsyth explained that novel form factors like foldables create content opportunities, particularly in audio, due to the need for more microphones and complex processing for different device modes. He characterized the Android market as an opportunistic business where the company leverages existing IP to win flagship sockets, but confirmed that the primary R&D investment focus remains on other growth markets like laptops.

Gary Mobley asked about the catalyst for re-engaging with a European OEM after nearly a decade and sought reaffirmation of the full-year non-GAAP gross margin guidance.

Answer

Executive Daniel Galves stated the re-engagement was a testament to Mobileye's product leadership, likely driven by a superior performance-to-cost ratio. CFO Moran Rojansky adjusted the gross margin outlook slightly, now expecting a 100 basis point improvement for the year, down from 150, which CEO Amnon Shashua attributed to a higher mix of lower-margin China volumes.