SKYWORKS SOLUTIONS INC

Previous wording

This report and other documents we have filed with the SEC contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), and are subject to the “safe harbor” created by those sections. Any statements that are not statements of historical fact should be considered to be forward-looking statements. Words such as “anticipates,” “believes,” “continues,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “seeks,” “should,” targets,” “will,” “would,” and similar expressions or variations or negatives of such words are intended to identify forward-looking statements but are not the exclusive means of identifying forward-looking statements in this report. Additionally, statements concerning future matters such as the possible impacts of geopolitical conflicts, inflation, recession, and the COVID-19 pandemic, as well as the development of new products, enhancements of technologies, sales levels, expense levels, the benefits of acquisitions we have made or may make in the future, and other statements regarding matters that are not historical are forward-looking statements. Although forward-looking statements in this report reflect the good faith judgment of our management as of the date the statement is first made, such statements can only be based on facts and factors then known and understood by us. Consequently, forward-looking statements involve inherent risks and uncertainties, and actual financial results and outcomes may differ materially and adversely from the results and outcomes discussed in, or anticipated by, the forward-looking statements. A number of important factors could cause actual financial results to differ materially and adversely from those in the forward-looking statements. We urge you to consider the risks and uncertainties discussed in the 2023 10-K, under the heading “Risk Factors” and in the other documents filed by us with the SEC in evaluating our forward-looking statements. We have no plans, and undertake no obligation, to revise or update our forward-looking statements to reflect any event or circumstance that may arise after the date of the initial filing of this Quarterly Report on Form 10-Q. We caution readers not to place undue reliance upon any such forward-looking statements, which speak only as of the date made.

Current wording

This report and other documents we have filed with the SEC contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), and are subject to the “safe harbor” created by those sections. Any statements that are not statements of historical fact should be considered to be forward-looking statements. Words such as “anticipates,” “believes,” “continues,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “seeks,” “should,” targets,” “will,” “would,” and similar expressions or variations or negatives of such words are intended to identify forward-looking statements but are not the exclusive means of identifying forward-looking statements in this report. Additionally, statements concerning future matters such as the possible impacts of geopolitical conflicts, inflation, recession, and global health crises, as well as the development of new products, enhancements of technologies, sales levels, expense levels, the benefits of acquisitions we have made or may make in the future, and other statements regarding matters that are not historical are forward-looking statements. Although forward-looking statements in this report reflect the good faith judgment of our management as of the date the statement is first made, such statements can only be based on facts and factors then known and understood by us. Consequently, forward-looking statements involve inherent risks and uncertainties, and actual financial results and outcomes may differ materially and adversely from the results and outcomes discussed in, or anticipated by, the forward-looking statements. A number of important factors could cause actual financial results to differ materially and adversely from those in the forward-looking statements. We urge you to consider the risks and uncertainties discussed in the 2023 10-K, under the heading “Risk Factors” and in the other documents filed by us with the SEC in evaluating our forward-looking statements. We have no plans, and undertake no obligation, to revise or update our forward-looking statements to reflect any event or circumstance that may arise after the date of the initial filing of this Quarterly Report on Form 10-Q. We caution readers not to place undue reliance upon any such forward-looking statements, which speak only as of the date made.

Previous wording

Three Months Ended December 29, 2023, and December 30, 2022

Current wording

Three and Six Months Ended March 29, 2024, and March 31, 2023

Previous wording

•Net revenue decreased to $1,201.5 million for the three months ended December 29, 2023, as compared to $1,329.3 million for the corresponding period in fiscal 2023, driven primarily by a decrease in demand for our non-mobile analog and mixed-signal products, partially offset by an increase in demand for our mobile products from smartphone customers in the Android ecosystem.

Current wording

•Net revenue decreased to $1,046.0 million for the three months ended March 29, 2024, as compared to $1,153.1 million for the corresponding period in fiscal 2023, driven primarily by a decrease in demand for our non-mobile analog and mixed-signal products.

Previous wording

•Our ending cash, cash equivalents, and marketable securities balance increased to $1,047.6 million. The increase in cash, cash equivalents, and marketable securities during the three months ended December 29, 2023, was primarily due to cash generated from operations of $774.9 million, partially offset by repayments of debt of $300.0 million, dividend payments of $108.9 million, and capital expenditures of $22.2 million.

Current wording

•Our ending cash, cash equivalents, and marketable securities balance increased to $1,221.3 million. The increase in cash, cash equivalents, and marketable securities during the three months ended March 29, 2024, was primarily due to cash generated from operations of $300.2 million, partially offset by dividend payments of $109.1 million, and capital expenditures of $27.6 million.

Previous wording

The decrease in net revenue for the three months ended December 29, 2023, as compared with the corresponding period in fiscal 2023, was driven primarily by a decrease in demand for our non-mobile analog and mixed-signal products, partially offset by an increase in demand for our mobile products from smartphone customers in the Android ecosystem.

Current wording

The decrease in net revenue for the three and six months ended March 29, 2024, as compared with the corresponding periods in fiscal 2023, was driven primarily by a decrease in demand for our non-mobile analog and mixed-signal products.

Previous wording

Gross profit represents net revenue less cost of goods sold. Our cost of goods sold consists primarily of purchased materials, labor, and overhead (including depreciation, share-based compensation expense, and amortization of acquisition intangibles, including inventory step-up expense) associated with product manufacturing. Erosion of average selling prices of established products is typical of the semiconductor industry. Consistent with trends in the industry, we anticipate that average selling prices for our established products will continue to decline over time. As part of our normal course of business, we intend to improve gross profit with efforts to increase unit volumes, improve manufacturing efficiencies, lower manufacturing costs of existing products, and by introducing new and higher value-added products.

Current wording

Gross profit represents net revenue less cost of goods sold. Our cost of goods sold consists primarily of purchased materials, labor, and overhead (including depreciation, share-based compensation expense, and amortization of acquisition intangibles) associated with product manufacturing. Erosion of average selling prices of established products is typical of the semiconductor industry. Consistent with trends in the industry, we anticipate that average selling prices for our established products will continue to decline over time. As part of our normal course of business, we intend to improve gross profit with efforts to increase unit volumes, improve manufacturing efficiencies, lower manufacturing costs of existing products, and by introducing new and higher value-added products.

Previous wording

The decrease in gross profit for the three months ended December 29, 2023, as compared with the corresponding period in fiscal 2023, was primarily the result of an unfavorable product mix, lower unit volumes, and lower average selling prices.

Current wording

The decrease in gross profit for the three and six months ended March 29, 2024, as compared with the corresponding periods in fiscal 2023, was primarily the result of an unfavorable product mix, lower unit volumes, and lower average selling prices.

Previous wording

The decrease in research and development expenses for the three months ended December 29, 2023, as compared with the corresponding period in fiscal 2023, was primarily related to a decrease in headcount-related expenses, including share-based compensation.

Current wording

The increase in research and development expenses for the three months ended March 29, 2024, as compared with the corresponding period in fiscal 2023, was primarily related to an increase in certain headcount-related expenses, including share-based compensation, as a result of our increased investment in developing new technologies and products.

Previous wording

The decrease in selling, general, and administrative expenses for the three months ended December 29, 2023, as compared with the corresponding period in fiscal 2023, was primarily related to a decrease in professional services costs.

Current wording

The decrease in selling, general, and administrative expenses for the three and six months ended March 29, 2024, as compared with the corresponding periods in fiscal 2023, was primarily related to a decrease in headcount-related expenses, including share-based compensation and a decrease in professional services costs.

Previous wording

The decrease in amortization expense for the three months ended December 29, 2023, as compared with the corresponding period in fiscal 2023, was primarily due to certain intangible assets that were acquired in prior fiscal years reaching the end of their useful lives.

Current wording

The decrease in amortization expense for the three and six months ended March 29, 2024, as compared with the corresponding periods in fiscal 2023, was primarily due to certain intangible assets that were acquired in prior fiscal years reaching the end of their useful lives.

Previous wording

The increase in restructuring, impairment, and other charges for the three months ended December 29, 2023, as compared with the corresponding period in fiscal 2023, was primarily due to the abandonment of a previously capitalized IPR&D project.

Current wording

Restructuring, impairment, and other charges (benefits) for the three months ended March 29, 2024 was not material. Restructuring, impairment, and other charges (benefits) for the six months ended March 29, 2024 was primarily related to the abandonment of a previously capitalized IPR&D project.

Previous wording

The decrease in interest expense for the three months ended December 29, 2023, as compared with the corresponding period in fiscal 2023, was due to the repayment of the outstanding balance on the Term Loans (as defined below).

Current wording

The decrease in interest expense for the three and six months ended March 29, 2024, as compared with the corresponding periods in fiscal 2023, was due to the repayment of the outstanding balance on the Term Loans (as defined below).

Previous wording

We recorded a provision for income taxes of $20.4 million (which consisted of $12.1 million and $8.3 million related to United States and foreign income taxes, respectively) for the three months ended December 29, 2023.

Current wording

We recorded a provision for income taxes of $9.6 million (which consisted of a benefit of $4.6 million and a provision of $14.2 million related to United States and foreign income taxes, respectively) and $30.0 million (which consisted of $7.5 million and $22.5 million related to United States and foreign income taxes, respectively) for the three and six months ended March 29, 2024, respectively.

Previous wording

The decrease in income tax expense for the three months ended December 29, 2023, as compared with the corresponding period in fiscal 2023, was primarily due to lower income from operations and a lower tax on GILTI, partially offset by an increase in the shortfall in tax deductions for share-based compensation.

Current wording

The decrease in income tax expense for the three and six months ended March 29, 2024, as compared with the corresponding periods in fiscal 2023, was primarily due to lower income from operations and a lower tax on GILTI, partially offset by an increase in the shortfall in tax deductions for share-based compensation.

Previous wording

Cash provided by operating activities consists of net income for the period adjusted for certain non-cash items and changes in certain operating assets and liabilities. The $1.5 million increase in cash provided by operating activities during the three months ended December 29, 2023, as compared with the corresponding period in fiscal 2023, was primarily related to favorable changes in working capital of $94.1 million, due primarily to a decrease in inventory, partially offset by lower net income.

Current wording

Cash provided by operating activities consists of net income for the period adjusted for certain non-cash items and changes in certain operating assets and liabilities. The $109.9 million decrease in cash provided by operating activities during the six months ended March 29, 2024, as compared with the corresponding period in fiscal 2023, was primarily related to lower net income and depreciation, partially offset by favorable changes in working capital of $58.7 million, due primarily to a decrease in inventory.

Previous wording

Cash used in investing activities consists primarily of capital expenditures and cash paid to purchase marketable securities, offset by cash received related to the sale or maturity of marketable securities. The $199.6 million decrease in cash used in investing activities during the three months ended December 29, 2023, as compared with the corresponding period in fiscal 2023, was primarily related to a decrease of $162.0 million in purchases of marketable securities and a decrease of $41.3 million in cash used for capital expenditures, partially offset by a decrease of $8.1 million in sales of marketable securities.

Current wording

Cash used in investing activities consists primarily of capital expenditures, cash paid to acquire intangible assets, and cash paid to purchase marketable securities, offset by cash received related to the sale or maturity of marketable securities. The $272.7 million decrease in cash used in investing activities during the six months ended March 29, 2024, as compared with the corresponding period in fiscal 2023, was primarily related to a decrease of $259.1 million in purchases of marketable securities and a decrease of $59.1 million in cash used for capital expenditures, partially offset by a decrease of $49.7 million in sales of marketable securities.

Previous wording

Cash used in financing activities consists primarily of proceeds and payments related to our long-term borrowings and cash transactions related to equity. The $144.1 million increase in cash used in financing activities during the three months ended December 29, 2023, as compared with the corresponding period in fiscal 2023, was primarily related to an increase of $300.0 million for the repayment of debt, an increase of $9.5 million in dividend payments, partially offset by a decrease of $166.2 million in stock repurchase activity.

Current wording

Cash used in financing activities consists primarily of proceeds and payments related to our long-term borrowings and cash transactions related to equity. The $57.2 million decrease in cash used in financing activities during the six months ended March 29, 2024, as compared with the corresponding period in fiscal 2023, was primarily related to a decrease of 175.3 million in stock repurchase activity, partially offset by an increase of $100.0 million for the repayment of debt, and an increase of $20.0 million in dividend payments.

Previous wording

Cash, cash equivalents, and marketable securities totaled $1,047.6 million as of December 29, 2023, representing an increase of $309.1 million from September 29, 2023.

Current wording

Cash, cash equivalents, and marketable securities totaled $1,221.3 million as of March 29, 2024, representing an increase of $482.8 million from September 29, 2023.

Previous wording

We have outstanding $500.0 million of Notes Due 2026 and $500.0 million of Notes Due 2031 (the “Notes”). During the three months ended December 29, 2023, we repaid $300.0 million of outstanding borrowings under the term loans ( the “Term Loans”) that the Company borrowed on July 26, 2021 under a $1.0 billion term loan facility (the “Term Loan Facility”). As of December 29, 2023, there were no borrowings outstanding under the Term Loan Facility. We have a Revolving Credit Agreement (the “Revolving Credit Agreement”) under which we may borrow up to $750.0 million for general corporate purposes and working capital needs of the Company and its subsidiaries. As of December 29, 2023, there were no borrowings outstanding under the revolving credit facility (the “Revolver”). The Revolving Credit Agreement expires July 26, 2026.

Current wording

We have outstanding $500.0 million of Notes Due 2026 and $500.0 million of Notes Due 2031 (the “Notes”). During the six months ended March 29, 2024, we repaid $300.0 million of outstanding borrowings under the term loans (the “Term Loans”) that the Company borrowed on July 26, 2021 under a $1.0 billion term loan facility (the “Term Loan Facility”). As of March 29, 2024, there were no borrowings outstanding under the Term Loan Facility. We have a Revolving Credit Agreement (the “Revolving Credit Agreement”) under which we may borrow up to $750.0 million for general corporate purposes and working capital needs of the Company and its subsidiaries. As of March 29, 2024, there were no borrowings outstanding under the revolving credit facility (the “Revolver”). The Revolving Credit Agreement expires July 26, 2026.