Skyworks Solutions Inc Goldman Sachs Communacopia + Technology Conference 2026
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All right, ready to go.
Okay. Good afternoon, everybody. Welcome to the Goldman Sachs Communacopia + Technology Conference. My name is Jim Schneider. I'm the Semiconductor Analyst here at Goldman Sachs, and it's my pleasure to welcome Skyworks CEO, Phil Brace to the stage.
Welcome, Phil. Thanks, Jim. Thanks for having us.
Always a pleasure to be here.
Great. Now, Phil, you're in the final stages of closing a proposed merger with Qorvo. This is something investors have been very focused on as a landmark event for the industry. I know you expect the transition to close relatively soon here. You completed the financing to permit the disclosure. Where do we stand today in terms of finalizing close, any remaining conditions?
Yeah. Thanks for the question. Pretty consistent with what we said in the last earnings call. Certainly, we are very confident that we are going to close this calendar year. We are preparing to close this fiscal year. Subsequent to the earnings call, we talked about the fact we kind of issued an 8-K, said that the HSR waiting periods and the waiting periods for the U.S. Federal Trade Commission had expired without further action. We then also went out and raised the debt, at actually what turns out to be pretty good interest rates since we raised it since then. I wish to say that was with foresight, but sometimes it is better to be lucky than good. We are just waiting right now, I would say. These things are never certain. We are around the airport, just waiting for permission to land.
Hopefully it comes soon, and we are chomping at the bit, ready to go.
Hopefully we do not run out of gas.
Yes. If not. Stepping back for a moment, what does success look like, say, 2 to 3 years after the close of the transaction?
More importantly, more tactically, what are sort of the key milestones investors should be tracking to evaluate the success along the way?
Yeah, that's great. Look, I really think this is a transformative deal for both companies in the industry. We talked about, you mentioned it in your opening remark. This company coming together really does two things. It has a scale play and a diversification play. The scale play really gets us significantly more revenue, and then we're able to really financially do $500 million of synergies, which we get there. So we should have, I think we're at a roughly $5.5 billion mobile business, and then a $2.5, $2.6 non-mobile business. The mobile business should have higher stability, better mix, because inside the mobile business, we're going to be skewing towards more of the premium tier side. Then on the non-mobile side, we have super attractive segments like aerospace and defense, which I'm really excited about.
Matter of fact, that one could be the grabbing the tiger by the tail from that side. So 2, 3 years from now, you'd expect us to see kind of certainly getting to our business model target 50%, 55% gross margin, 30%, 35% operating margin, 35% to 40% EBITDA margins, very attractive capital structure, large and growing markets. Milestones to look along the way. Obviously getting to close will be one thing. OpEx synergies, how are we doing on that? We talked about $500 million total, 24 to 36 months, probably front-end loaded OpEx side. The factory consolidation will take a little more time to go do that. So are we able to close? Are we able to start implementing some of these synergies? Is the broad markets growing faster than the mobile side? Are we generating some stability on the mobile business?
Ultimately, are we delivering the financial performance we talked about? It's an unbelievable transformative opportunity, and I just can't wait to get started.
Yeah. From a product and technology perspective, what are the things that the combined company can do they couldn't have done as independent standalone companies, and what does it mean for the product portfolio going forward?
Yeah, I think that's a really important question and something that we really haven't underwritten at all. When we looked at the deal and how we put it together, we really just focused on the synergies and what are the synergies we get. We haven't really talked about anything at all of what we can do at the one plus one equals two scenario. Some of that is because we still need to get under the covers and figure that else out. I'll give you an example. If we just look at the handset side today, Qorvo, the product lines are very overlapping. They have antenna tuning, envelope tracking, and PMIC. We don't have any of those technologies. When you think from the receiver all the way to the antenna, you might believe that bringing thousands of RF engineers might allow us to do things differently.
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