Citi 2015 Global Tech Conference Qorvo, Inc.

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Georgia Harrell
8 years ago
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1 Citi 2015 Global Tech Conference 1

2 Safe Harbor Language Forward-Looking Statements This presentation includes "forward-looking statements" within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of These forward-looking statements include, but are not limited to, statements about trends, our future plans, objectives and expectations. Forward-looking statements typically are identified by the use of terms such as "may," "will," "should," "could," "expect," "plan," "anticipate," "believe," "estimate," "predict," "potential, continue and similar words. Any forward-looking statements we make are subject to business, economic and other risks and uncertainties and actual results and events could differ materially from those expressed or implied by these forward-looking statements. Please see the Risk Factors section of our Annual Report on Form 10-K for examples of the risks and uncertainties that could cause actual results and events to differ from those expressed or implied by our forward-looking statements. We do not intend to update any of these forward-looking statements or publicly announce any revisions to these forward-looking statements, other than as required under federal securities laws. 2

3 Favorable Industry Dynamics RF Expanding in Economic Value/Network Operators The human appetite for mobile data is limitless. The demand for data is ubiquitous and will continue globally. Spectrum is a precious commodity. As demand for mobile data increases, the costs of managing and delivering mobile data traffic are skyrocketing. RF is increasing in importance to the carrier. Carriers want to lower their costs associated with mobile data traffic. RF optimizes frequency spectrum, increases data throughput speeds and offloads data traffic to Wi-Fi networks. As mobile data traffic increases, RF helps improve network efficiency and enhance carrier competitiveness. 3

4 Favorable Industry Dynamics RF Expanding in Economic Value/Smartphone Manufacturers The use case for handsets is shifting. Today: streaming media, videoconferencing, and crowd-sourced traffic info. In 5-10 years: data-intensive cloud-based applications and immersive virtual reality content. RF is becoming more critical to the device. Consumer pull for data- and compute-intensive cloud-based applications is increasing the economic value of RF relative to % of BOM. RF is increasing in importance to the OEM. Consumer demand is constant for improved call quality, extended battery life, greater data throughput, and lower latency, versus shifting consumer preferences for vendors, operating systems, apps, keyboards, form factors, etc. 4

The Transition to 4G is Just Beginning 10 9 8 7 6 5

5 The Transition to 4G is Just Beginning Subscriptions in billions G 3G 4G *Source: GSMA and Qorvo 5

6 Increasing Value With More RF, Better RF $17.5b Mobile Device RF TAM ~17% CAGR Typical 2G Typical 3G Typical LTE Global LTE $15.0b $12.5b $10.0b $7.5b $5.0b $2.5b $0.0b Filter Content $0.25 $1.25 $2.50 $8.00 Switching / Tuning $0.00 $0.25 $1.25 $3.75 Power Amplifiers $0.30 $1.25 $2.00 $3.25 Other $0.00 $0.00 $0.25 $0.50 Total RF content $0.55 $2.75 $6.00 $

7 Future Growth Driven by Highly Integrated Solutions RF TAM/Integrated + Discrete $20 B $15 B Discrete Solutions Integrated Solutions Annual TAM ($ in billions) $10 B $5 B $0 B Source: Management estimates 7

8 Diversified Market Opportunities Diversified markets undergoing technology transitions create growth opportunities Base Station Wi-Fi Defense Optical Cable / CATV Growth Drivers 4G / LTE Worldwide Base Station Rollout Connected Devices Explosion in # of Connections Innovation Technology Upgrades & New Applications Data Demand More worldwide users driving more data Digital Home Increasing Digital Content Consumption Industry Trends System Upgrades Small cells and GaN for efficiency, bandwidth, higher frequency Broader bandwidth, power efficiency and filtering to remove LTE interference Upgrades Broader bandwidth; higher frequency; multi-band operation 40G 100G Backhaul network upgrades at Telcos; new data center mkt DOCSIS 3.1 Fiber driven deeper into the network and complex modulation Relationships with top 3 Tier 1 OEMS LTE / Wi-Fi Co-exist filters Share leader in airborne radar Advanced semiconductor processes Incumbent market leadership Advantages Module integration with LNA and Filters Top performing GaN power amplifiers Strong Chipset partner relationships High performance 2.4 and 5 GHz cores Trusted foundry & solution supplier Broad portfolio of new GaN products Low-cost packaging and integration On-site design & apps support Highly linear GaN products Hybrid and MMIC design capability Solution breadth 8

9 Target Operating Model Metric Target Revenue Growth (1) 2015 and beyond Greater than Mkt Gross Margin 50% Target Model (2) Operating Expenses 20% Operating Margin 30% (1) Industry growth rate projected to be 10%-15% (2) Non-GAAP 9

10 Cash and Taxes Capital Allocation Significant cash flow creates opportunity Premium filter and low cost assembly and test capacity Share repurchases IDP market acquisitions Efficient Tax Structure International sales through Singapore 10%-15% cash tax rate in year one 10

11 Summary Qorvo is leveraged to today s growth opportunities, is positioned to win Growing 10%-15% per year Diversified by markets, customers and products 50/20/30 operating model Investing in wide, defensible technology moats Cash flow to support share repurchases, M&A, etc. 11

12 Thank You

Corporate Overview. November 2015

Corporate Overview. November 2015 Corporate Overview November 2015 Safe Harbor Statement Please note that our presentation today will include forwardlooking statements as defined in the Private Securities Litigation Reform Act of 1995.