What changed in this filing

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Item 1. Financial Statements

2024-01-31 compared with 2023-08-08 · 145 added, 181 removed, 369 unchanged (47% of the section changed)

3 unchanged sentences

(Unaudited, in millions, except per share amounts)

Three Months Ended Nine Months Ended

2022 June 30,

Three Months Ended

December 29, 2023 December 30, 2022

Net revenue $ 1,201.5 $ 1,329.3

9 unchanged sentences

Interest expense ( 10.0 ) ( 16.9 )

Other income (expense), net 7.6 ( 0.4 ) 13.6 ( 0.9 )

Other income, net

Income before income taxes 251.7 350.7

11 unchanged sentences

(Unaudited, in millions)

Three Months Ended Nine Months Ended

2022 June 30,

Three Months Ended

December 29, 2023 December 30, 2022

Net income $ 231.3 $ 309.4

7 unchanged sentences

(In millions, except per share amounts)

2023 September 30,

December 29, 2023 September 29, 2023

ASSETS (unaudited)

3 unchanged sentences

Receivables, net of allowances of $ 0.9 and $ 0.8 , respectively

726.8 1,094.0

Inventory 926.8 1,119.7

27 unchanged sentences

525.0 shares authorized;

159.2 shares issued and outstanding at June 30, 2023, and 160.2 shares issued and outstanding at September 30, 2022

160.2 shares issued and outstanding at December 29, 2023, and 159.5 shares issued and outstanding at September 29, 2023

Additional paid-in capital 194.4 172.4

7 unchanged sentences

(Unaudited, in millions)

Nine Months Ended

Three Months Ended

December 29, 2023 December 30, 2022

Cash flows from operating activities:

3 unchanged sentences

Depreciation 64.7 99.4

Amortization of intangible assets, including inventory step-up 174.7 219.1

Amortization of intangible assets

Deferred income taxes ( 2.6 ) ( 29.9 )

13 unchanged sentences

Sales and maturities of marketable securities 3.2 11.3

Other 5.9 7.6

Net cash used in investing activities ( 23.5 ) ( 223.1 )

4 unchanged sentences

Net proceeds from exercise of stock options 1.1 1.1

Proceeds from employee stock purchase plan 15.5 15.6

Payments of debt ( 300.0 ) —

Net cash used in financing activities ( 440.5 ) ( 296.4 )

Net increase (decrease) in cash and cash equivalents 155.6 ( 239.9 )

Net increase in cash and cash equivalents

Cash and cash equivalents at beginning of period 718.8 566.0

4 unchanged sentences

Incentives paid in common stock

$ 19.2 $ 32.2

Non-cash investing in capital expenditures, accrued but not paid $ 7.4 $ 37.2

13 unchanged sentences

Balance at December 29, 2023 160.2 $ 40.1 — $ — $ 194.4 $ 5,998.4 $ ( 5.7 ) $ 6,227.2

Net income — $ — — $ — $ — 232.8 — 232.8

Exercise and settlement of share-based awards, net of shares withheld for taxes 0.2 — — ( 0.7 ) 15.6 — — 14.9

Share-based compensation expense — — — — 43.0 — — 43.0

Repurchase and retirement of common stock ( 0.1 ) — — 0.7 ( 6.3 ) ( 3.5 ) — ( 9.1 )

Dividends declared — — — — — ( 98.6 ) — ( 98.6 )

Other comprehensive loss — — — — — — — —

Balance at March 31, 2023 159.2 $ 39.7 — $ — $ 56.2 $ 5,642.6 $ ( 5.6 ) $ 5,732.9

Balance at September 30, 2022 160.2 $ 40.0 — $ — $ 11.9 $ 5,421.9 $ ( 4.8 ) $ 5,469.0

Net income — — — — — 309.4 — 309.4

1 unchanged sentence

Share-based compensation expense — — — — 49.7 — — 49.7

Dividends declared — — — — — ( 98.7 ) — ( 98.7 )

Repurchase and retirement of common stock ( 1.8 ) ( 0.5 ) ( 0.3 ) 31.9 ( 77.7 ) ( 120.0 ) — ( 166.3 )

Other comprehensive income — — — — — — — —

Balance at June 30, 2023 159.2 $ 39.8 — $ — $ 104.0 $ 5,739.7 $ ( 5.6 ) $ 5,877.9

Balance at October 1, 2021 165.3 $ 41.3 — $ ( 1.7 ) $ 79.6 $ 5,185.8 $ ( 7.9 ) $ 5,297.1

Net income — — — — — 399.9 — 399.9

Exercise and settlement of share-based awards, net of shares withheld for taxes 0.9 0.2 0.5 ( 80.1 ) 33.8 — — ( 46.1 )

Share-based compensation expense — — — — 42.0 — — 42.0

Stock repurchase program ( 1.7 ) ( 0.4 ) 1.7 ( 269.4 ) 0.4 — — ( 269.4 )

Dividends declared — — — — — ( 99.4 ) — ( 99.4 )

1 unchanged sentence

Balance at December 30, 2022 159.1 $ 39.7 — $ — $ 3.9 $ 5,511.9 $ ( 5.6 ) $ 5,549.9

Net income — — — — — 305.8 — 305.8

Exercise and settlement of share-based awards, net of shares withheld for taxes 0.2 — — ( 3.5 ) 16.3 — — 12.8

Share-based compensation expense — — — — 45.3 — — 45.3

Stock repurchase program ( 3.0 ) ( 0.7 ) 3.0 ( 418.0 ) 0.7 — — ( 418.0 )

Dividends declared — — — — — ( 91.2 ) — ( 91.2 )

Other comprehensive loss — — — — — — ( 0.3 ) ( 0.3 )

Balance at April 1, 2022 161.7 $ 40.4 5.2 $ ( 772.7 ) $ 218.1 $ 5,707.8 $ ( 5.0 ) $ 5,188.6

Net income — — — — — 267.3 — 267.3

Exercise and settlement of share-based awards, net of shares withheld for taxes — — — ( 1.6 ) 0.6 — — ( 1.0 )

Share-based compensation expense — — — — 48.6 — — 48.6

Stock repurchase program ( 1.0 ) ( 0.3 ) 1.0 ( 119.1 ) 0.3 — — ( 119.1 )

Dividends declared — — — — — ( 90.0 ) — ( 90.0 )

Other comprehensive loss — — — — — — 0.2 0.2

Balance at July 1, 2022 160.7 $ 40.1 6.2 $ ( 893.4 ) $ 267.6 $ 5,885.1 $ ( 4.8 ) $ 5,294.6

See accompanying Notes to Consolidated Financial Statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION, AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Skyworks Solutions, Inc., together with its consolidated subsidiaries (“Skyworks” or the “Company”), is empowering the wireless networking revolution.

15 unchanged sentences

The fiscal year ended on September 29, 2023 consisted of 52 weeks (“fiscal 2023”).

The three and nine months ended June 30, 2023, and July 1, 2022, consisted of 13 weeks and 39 weeks, respectively.

The three months ended December 29, 2023, and December 30, 2022, each consisted of 13 weeks.

Property, Plant, and Equipment

Property, plant, and equipment are carried at cost less accumulated depreciation, with significant renewals and betterments being capitalized and retired equipment written off in the respective periods.

Maintenance and repairs are expensed as incurred.

Depreciation is calculated using the straight-line method over the estimated useful lives, which range from five to forty years for buildings and improvements and from five to ten years for machinery and equipment.

Leasehold improvements are depreciated over the lesser of the economic life or the life of the associated lease.

During the three months ended December 29, 2023, the Company changed its accounting estimate for the expected useful lives of certain machinery and equipment.

The Company evaluated its current asset base and reassessed the estimated useful lives of certain machinery and equipment in connection with its recent usage of older equipment, including considering the technological and physical obsolescence of such machinery and equipment.

Based on its ability to re-use equipment across generations of process technologies and historical usage trends, the Company determined that the expected useful lives for certain machinery and equipment should be increased by up to two years to reflect more closely the estimated economic lives of those assets.

This change in estimate was applied prospectively effective for the first quarter of fiscal 2024 and resulted in a decrease in depreciation expense of $ 22.9 million for the three months ended December 29, 2023.

This benefit increased income from operations by $ 2.6 million and decreased ending inventory by $ 20.3 million as of December 29, 2023.

As a result of this change in accounting estimate, net income increased by $ 2.6 million and diluted earnings per share increased by $ 0.02 for the three months ended December 29, 2023.

Recently Issued Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, “Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosure” (“ASU 2023-07”).

ASU 2023-07 requires disclosure of incremental segment information on an annual and interim basis.

ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, on a retrospective basis.

Early adoption is permitted.

The Company is currently evaluating the impact of ASU 2023-07 on its consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU 2023-09,“Income Taxes (Topic 740):

Improvements to Income Tax Disclosures” (“ASU 2023-09”).

ASU 2023-09 includes amendments that further enhance income tax disclosures, primarily through standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction.

ASU 2023-09 is effective for annual periods beginning after December 15, 2024, on either a prospective or retrospective basis, with early adoption permitted.

The Company is currently evaluating the impact of ASU 2023-09 on its consolidated financial statements and related disclosures.

REVENUE RECOGNITION

2 unchanged sentences

Net revenue by geographic area is as follows (in millions):

Three Months Ended Nine Months Ended

2022 June 30,

Three Months Ended

December 29, 2023 December 30, 2022

United States $ 969.2 $ 1,028.3

1 unchanged sentence

Taiwan 71.3 85.6

Europe, Middle East, and Africa 51.3 58.3 164.0 180.6

South Korea 45.6 35.8

Europe, Middle East, and Africa 27.1 54.1

Other Asia-Pacific 8.4 19.2

1 unchanged sentence

Net revenue by sales channel is as follows (in millions):

Three Months Ended Nine Months Ended

2022 June 30,

Three Months Ended

December 29, 2023 December 30, 2022

Distributors $ 1,062.9 $ 1,179.1

6 unchanged sentences

Current Noncurrent

2023 September 30,

2022 June 30,

2023 September 30,

December 29, 2023 September 29, 2023 December 29, 2023 September 29, 2023

Treasury and government securities $ 15.7 $ 15.1 $ 2.0 $ 4.1

2 unchanged sentences

Total marketable securities $ 15.9 $ 15.6 $ 2.0 $ 4.1

Neither gross unrealized gains and losses nor realized gains and losses were material as of June 30, 2023, or September 30, 2022.

Neither gross unrealized gains and losses nor realized gains and losses were material as of December 29, 2023, or September 29, 2023.

Assets and Liabilities Measured and Recorded at Fair Value on a Recurring Basis

5 unchanged sentences

Assets and liabilities recorded at fair value on a recurring basis consisted of the following (in millions):

June 30, 2023 September 30, 2022

December 29, 2023 September 29, 2023

Fair Value Measurements Fair Value Measurements

7 unchanged sentences

The Company’s non-financial assets and liabilities, such as goodwill, intangible assets, and other long-lived assets resulting from business combinations, are measured at fair value using income approach valuation methodologies at the date of acquisition and are subsequently re-measured if there are indicators of impairment.

During the three months ended June 30, 2023, there were no indicators of impairment identified.

During the nine months ended June 30, 2023, the Company recorded impairment charges of $17.0 million.

There were no indicators of impairment identified during the three and nine months ended July 1, 2022.

During the three months ended December 29, 2023, the Company abandoned a previously capitalized in-process research and development (“IPR&D”) project and recorded an impairment charge of $ 16.1 million.

There were no indicators of impairment identified during the three months ended December 30, 2022.

Fair Value of Debt

1 unchanged sentence

The estimated fair values are based on Level 2 inputs as the fair value is based on quoted prices for the Company’s debt and comparable instruments in inactive markets.

The carrying value of the Term Loans (as defined below) approximates their fair value as the Term Loans are carried at a market observable interest rate that resets periodically.

The carrying amount and estimated fair value of debt consists of the following (in millions):

2023 September 30,

December 29, 2023 September 29, 2023

Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value

1 unchanged sentence

3.00% Senior Notes due 2031 495.3 430.7 495.2 390.4

3.00% Senior Notes due 2031 495.0 406.5 494.5 377.6

Total debt under Senior Notes $ 993.2 $ 893.0 $ 992.9 $ 834.9

Inventory consists of the following (in millions):

2023 September 30,

December 29, 2023 September 29, 2023

Raw materials $ 44.7 $ 57.2

1 unchanged sentence

Finished goods 191.1 315.7

Finished goods held on consignment by customers 2.9 3.0

Total inventory $ 926.8 $ 1,119.7

1 unchanged sentence

Property, plant, and equipment, net consists of the following (in millions):

2023 September 30,

December 29, 2023 September 29, 2023

Land and improvements $ 11.8 $ 11.8

7 unchanged sentences

GOODWILL AND INTANGIBLE ASSETS

There were no changes to the carrying amount of goodwill during the three and nine months ended June 30, 2023.

There were no changes to the carrying amount of goodwill during the three months ended December 29, 2023.

The Company tests its goodwill for impairment annually as of the first day of its fourth fiscal quarter and in interim periods if certain events occur indicating the carrying value of goodwill may be impaired.

There were no indicators of impairment noted during the three and nine months ended June 30, 2023.

There were no indicators of impairment noted during the three months ended December 29, 2023.

Intangible assets consist of the following (in millions):

Period (Years) June 30, 2023 September 30, 2022

Period (Years) December 29, 2023 September 29, 2023

Carrying Amount

Customer relationships and backlog 2.3 $ 154.6 $ ( 151.0 ) $ 3.6 $ 154.6 $ ( 122.3 ) $ 32.3

Developed technology and other 6.1 $ 1,290.4 $ ( 421.3 ) $ 869.1 $ 1,290.4 $ ( 379.4 ) $ 911.0

3 unchanged sentences

Fully amortized intangible assets are eliminated from both the gross and accumulated amortization amounts in the first quarter of each fiscal year.

During the nine months ended June 30, 2023, $ 9.5 million of in-process research and development (“IPR&D”) assets were transferred to definite-lived intangible assets, and are being amortized over their useful lives of 12.0 years.

Amortization expense related to definite-lived intangible assets was $ 51.3 million and $ 174.7 million for the three and nine months ended June 30, 2023, respectively.

Amortization expense related to definite-lived intangible assets was $ 65.9 million and $ 211.8 million for the three and nine months ended July 1, 2022, respectively.

Amortization expense related to definite-lived intangible assets was $ 48.1 million and $ 72.0 million for the three months ended December 29, 2023 and December 30, 2022, respectively.

Annual amortization expense for the next five fiscal years related to definite-lived intangible assets, excluding IPR&D, is expected to be as follows (in millions):

Remaining 2023 2024 2025 2026 2027 Thereafter

Remaining 2024

2025 2026 2027 2028 Thereafter

Amortization expense $ 131.7 $ 156.6 $ 128.7 $ 113.5 $ 90.3 $ 286.5

The provision for income taxes consists of the following components (in millions):

Three Months Ended Nine Months Ended

2022 June 30,

Three Months Ended

December 29, 2023 December 30, 2022

United States income taxes $ 12.1 $ 26.4

2 unchanged sentences

Effective tax rate 8.1 % 11.8 %

The difference between the Company’s effective tax rate and the 21.0 % United States federal statutory rate for the three and nine months ended June 30, 2023 resulted primarily from foreign earnings taxed at rates lower than the federal statutory rate, a benefit from foreign-derived intangible income deduction (“FDII”), and research and experimentation and foreign tax credits earned, partially offset by a tax on global intangible low-taxed income (“GILTI”), and tax expense related to a change in the reserve for uncertain tax positions.

In addition to the aforementioned factors, the difference between the Company’s effective tax rate and the 21.0 % United States federal statutory rate for the three and nine months ended July 1, 2022 was due to windfall tax deductions.

During the three and nine months ended June 30, 2023, the Company concluded an Internal Revenue Service examination of its federal income tax returns for the fiscal year ended September 28, 2018 (“fiscal 2018”) and the fiscal year ended September 27, 2019 (“fiscal 2019”).

The Company agreed to various adjustments to fiscal 2018 and fiscal 2019 tax returns that resulted in the recognition of tax expense of $ 1.6 million during the nine months ended June 30, 2023.

The difference between the Company’s effective tax rate and the 21.0 % United States federal statutory rate for the three months ended December 29, 2023 and December 30, 2022 resulted primarily from foreign earnings taxed at rates lower than the federal statutory rate, a benefit from foreign-derived intangible income deduction (“FDII”), and research and experimentation and foreign tax credits earned, partially offset by a tax on global intangible low-taxed income (“GILTI”), and tax expense related to share-based compensation shortfalls.

In August 2022, the U.S.

government enacted the Inflation Reduction Act, which imposes a corporate alternative minimum tax (“CAMT”) of 15% on corporations with three-year average annual adjusted financial statement income exceeding $1.0 billion.

The Company is subject to the provisions of CAMT in fiscal 2024.

CAMT had no impact to the Company’s consolidated financial statements for the three months ended December 29, 2023.

COMMITMENTS AND CONTINGENCIES

2 unchanged sentences

The semiconductor industry is characterized by vigorous protection and pursuit of intellectual property rights.

From time to time, third parties have asserted and may in the future assert patent, copyright, trademark, and other intellectual property rights to technologies that are important to the Company’s business and have demanded and may in the future demand that the Company license their technology.

license their technology.

The outcome of any such litigation cannot be predicted with certainty and some such lawsuits, claims, or proceedings may be disposed of unfavorably to the Company.

12 unchanged sentences

In certain instances, the Company’s indemnities do not provide for any limitation of the maximum potential future payments the Company could be obligated to make.

The Company has not recorded any liability for these indemnities in

the accompanying consolidated balance sheets and does not expect that such obligations will have a material adverse impact on its financial statements.

The Company has not recorded any liability for these indemnities in the accompanying consolidated balance sheets and does not expect that such obligations will have a material adverse impact on its financial statements.

Purchase Commitments

The Company purchases materials primarily pursuant to individual purchase orders, some of which have underlying master purchase agreements.

Some of these purchase commitments are cancellable, and some are non-cancelable, depending on the terms with each individual supplier.

In the event of cancellation, the Company may be required to pay costs incurred through the date of cancellation or other fees.

When cancellation would result in incurring costs or other fees, the Company has historically sought to negotiate amended terms to the original agreements and orders to limit its exposure.

As such, the Company believes that purchase commitments as of any particular date may not be a reliable indicator of future commitments.

The Company maintains certain minimum purchase commitments under long-term capacity reservation agreements primarily with foundries for the purchase of wafers.

Under these agreements, the Company has agreed to pay refundable deposits to the suppliers in exchange for reserved manufacturing production capacity over the term of the agreements.

As of December 29, 2023, the remaining deposits under the long-term capacity reservation agreements were $ 43.0 million and $ 16.0 million recorded within other current assets and other long-term assets, respectively.

STOCKHOLDERS’ EQUITY

Stock Repurchase

On January 31, 2023, the Board of Directors approved a new stock repurchase program (“January 31, 2023 stock repurchase program”), pursuant to which the Company is authorized to repurchase up to $ 2.0 billion of its common stock from time to time through February 1, 2025 , on the open market or in privately negotiated transactions, in compliance with applicable securities laws and other legal requirements.

On January 31, 2023, the Board of Directors approved a stock repurchase program (“January 31, 2023 stock repurchase program”), pursuant to which the Company is authorized to repurchase up to $ 2.0 billion of its common stock from time to time through February 1, 2025 , on the open market or in privately negotiated transactions, in compliance with applicable securities laws and other legal requirements.

The January 31, 2023 stock repurchase program succeeds in its entirety the stock repurchase program approved by the Board of Directors on January 26, 2021 (“January 26, 2021 stock repurchase program”).

2 unchanged sentences

The Company currently expects to fund the January 31, 2023 stock repurchase program using the Company’s working capital.

During the three months ended June 30, 2023, the Company did not repurchase any shares of its common stock pursuant to the January 31, 2023 stock repurchase program.

During the nine months ended June 30, 2023, the Company paid $ 175.3 million (including commissions) in connection with the repurchase of 1.9 million shares of its common stock (paying an average price of $ 90.60 per share), all of which shares were repurchased pursuant to the January 26, 2021 stock repurchase program.

As of June 30, 2023, $ 2.0 billion remained available under the January 31, 2023 stock repurchase program.

During the three months ended July 1, 2022, the Company paid $ 119.1 million (including commissions) in connection with the repurchase of 1.0 million shares of its common stock (paying an average price of $ 119.07 per share).

During the nine months ended July 1, 2022, the Company paid $ 806.5 million (including commissions) in connection with the repurchase of 5.7 million shares of its common stock (paying an average price of $ 141.30 per share), all of which shares were repurchased pursuant to the January 26, 2021 stock repurchase program.

On August 7, 2023 , the Company announced that the Board of Directors had declared a cash dividend on the Company’s common stock of $ 0.68 per share.

This dividend is payable on September 19, 2023 , to the Company’s stockholders of record as of the close of business on August 29, 2023 .

During the three months ended December 29, 2023, the Company did not repurchase any shares of its common stock pursuant to the January 31, 2023 stock repurchase program.

As of December 29, 2023, $ 2.0 billion remained available under the January 31, 2023 stock repurchase program.

During the three months ended December 30, 2022, the Company paid $ 166.2 million (including commissions) in connection with the repurchase of 1.8 million shares of its common stock (paying an average price of $ 90.57 per share), all of which shares were repurchased pursuant to the January 26, 2021 stock repurchase program.

On January 30, 2024 , the Company announced that the Board of Directors had declared a cash dividend on the Company’s common stock of $ 0.68 per share.

This dividend is payable on March 12, 2024 , to the Company’s stockholders of record as of the close of business on February 20, 2024 .

Dividends charged to retained earnings were as follows (in millions, except per share data):

Fiscal Years Ended

September 27 , 2024 September 29, 2023

Per Share Total Amount Per Share Total Amount

First quarter $ 0.68 $ 108.9 $ 0.62 $ 99.4

Second quarter 0.62 98.6 0.56 91.2

Third quarter 0.62 98.7 0.56 90.0

Total dividends $ 1.86 $ 296.7 $ 1.68 $ 273.7

Share-based Compensation

The following table summarizes the share-based compensation expense by line item in the Consolidated Statements of Operations (in millions):

Three Months Ended Nine Months Ended

2022 June 30,

Three Months Ended

December 29, 2023 December 30, 2022

Cost of goods sold $ 8.8 $ 2.6

4 unchanged sentences

The following table sets forth the computation of basic and diluted earnings per share (in millions, except per share amounts):

Three Months Ended Nine Months Ended

2022 June 30,

Three Months Ended

December 29, 2023 December 30, 2022

Net income $ 231.3 $ 309.4

6 unchanged sentences

Basic earnings per share are calculated by dividing net income by the weighted average number of shares of the Company’s common stock outstanding during the period.

The calculation of diluted earnings per share includes the dilutive effect of equity-based awards that were outstanding during the three and nine months ended June 30, 2023, and July 1, 2022, using the treasury stock method.

The calculation of diluted earnings per share includes the dilutive effect of equity-based awards that were outstanding during the three months ended December 29, 2023, and December 30, 2022, using the treasury stock method.

Shares issuable upon the vesting of performance stock awards are likewise included in the calculation of diluted earnings per share as of the date the condition(s) have been satisfied, assuming the end of the reporting period was the end of the contingency period.

2 unchanged sentences

Other current assets consist of the following (in millions):

2023 September 30,

December 29, 2023 September 29, 2023

Prepaid expenses $ 288.4 $ 306.0

2 unchanged sentences

Other current liabilities consist of the following (in millions):

2023 September 30,

December 29, 2023 September 29, 2023

Accrued customer liabilities $ 240.6 $ 270.9

3 unchanged sentences

Total other current liabilities $ 384.2 $ 402.8

SUBSEQUENT EVENT

The Company has a term credit agreement (the “Term Credit Agreement”) providing for a $ 1.0 billion term loan facility (the “Term Loan Facility”).

On July 26, 2021, the Company borrowed $ 1.0 billion in aggregate principal amount of term loans (the “Term Loans”) under the Term Loan Facility to finance a portion of the purchase price to acquire the Infrastructure and Automotive business of Silicon Laboratories Inc.

and to pay fees and expenses incurred in connection therewith.

On July 12, 2023, the Company repaid $ 150.0 million of outstanding borrowings under the Term Loans.

As of July 12, 2023, there were $ 350.0 million of borrowings outstanding under the Term Credit Agreement.

MANAGEMENT ’ S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

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.

Words such as “anticipates,” “believes,” “continue,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “seek,” “should,” “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, 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 by us.

Consequently, forward-looking statements involve inherent risks and uncertainties, and actual 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 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 2022 10-K, under the heading “Risk Factors” and in the other documents we have filed with the SEC in evaluating our forward-looking statements.

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.

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.

In this document, the words “we,” “our,” “ours,” and “us” refer only to Skyworks Solutions, Inc., and its subsidiaries and not any other person or entity.

Impact of COVID-19

The COVID-19 pandemic has affected business conditions in our industry.

The duration, severity, and future impact of the pandemic, including as a result of more contagious variants of the virus that causes COVID-19, continue to be uncertain and could still result in significant disruptions to our business operations, as well as negative impacts to our financial condition.

We caution readers not to place undue reliance upon any such forward-looking statements, which speak only as of the date made.

In this document, the words “we,” “our,” “ours,” “us,” and “the Company” refer only to Skyworks Solutions, Inc., and its subsidiaries and not any other person or entity.

RESULTS OF OPERATIONS

Three and Nine Months Ended June 30, 2023, and July 1, 2022

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

The following table sets forth the results of our operations expressed as a percentage of net revenue:

Three Months Ended Nine Months Ended

2022 June 30,

Three Months Ended

December 29, 2023 December 30, 2022

Net revenue 100.0 % 100.0 %

9 unchanged sentences

Interest expense 0.8 1.3

Other income (expense), net 0.7 — 0.4 —

Other income, net

Income before income taxes 20.9 26.4

2 unchanged sentences

We, together with our consolidated subsidiaries, are empowering the wireless networking revolution.

Our highly innovative analog semiconductors are connecting people, places, and things spanning a number of new and previously unimagined applications within the aerospace, automotive, broadband, cellular infrastructure, connected home, defense, entertainment and gaming, industrial, medical, smartphone, tablet, and wearable markets.

During the three months ended June 30, 2023, the following key factors contributed to our overall results of operations, financial position, and cash flows:

• Net revenue decreased to $1,071.2 million for the three months ended June 30, 2023, as compared to $1,232.6 million for the corresponding period in fiscal 2022, driven primarily by a decrease in demand for our mobile products from smartphone customers in the Android ecosystem.

• Our ending cash, cash equivalents, and marketable securities balance decreased to $739.5 million.

The decrease in cash, cash equivalents, and marketable securities during the three months ended June 30, 2023, was primarily due to repayments of debt of $500.0 million, dividend payments of $98.7 million, and capital expenditures of $31.4 million, partially offset by cash generated from operations of $305.6 million.

Three Months Ended Nine Months Ended

2023 Change July 1,

2022 June 30,

2023 Change July 1,

Our highly innovative analog and mixed-signal semiconductors are connecting people, places, and things spanning a number of new and previously unimagined applications within the aerospace, automotive, broadband, cellular infrastructure, connected home, defense, entertainment and gaming, industrial, medical, smartphone, tablet, and wearable markets.

During the three months ended December 29, 2023, the following key factors contributed to our overall results of operations, financial position, and cash flows:

• 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.

• 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.

Three Months Ended

December 29, 2023 Change December 30, 2022

(dollars in millions)

2 unchanged sentences

We generally experience seasonal peaks during our fourth and first fiscal quarters (which correspond to the second half of the calendar year), primarily as a result of increased worldwide production of consumer electronics in anticipation of holiday sales, whereas our second and third fiscal quarters are typically lower and in line with seasonal industry trends.

The decrease in net revenue for the three and nine months ended June 30, 2023, as compared with the corresponding periods in fiscal 2022, was driven primarily by a decrease in demand for our mobile products from smartphone customers in the Android ecosystem.

Three Months Ended Nine Months Ended

2023 Change July 1,

2022 June 30,

2023 Change July 1,

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.

Three Months Ended

December 29, 2023 Change December 30, 2022

(dollars in millions)

3 unchanged sentences

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.

The decrease in gross profit for the three and nine months ended June 30, 2023, as compared with the corresponding periods in fiscal 2022, was primarily the result of lower average selling prices and lower unit volumes with a gross profit impact of $148.7 million and $499.8 million, respectively, partially offset by a favorable product mix with a gross profit impact of $70.6 million and $254.0 million, respectively.

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.

Research and Development

Three Months Ended Nine Months Ended

2023 Change July 1,

2022 June 30,

2023 Change July 1,

Three Months Ended

December 29, 2023 Change December 30, 2022

(dollars in millions)

2 unchanged sentences

Research and development expenses consist primarily of direct personnel costs including share-based compensation expense, costs for pre-production evaluation, and testing of new devices, non-production masks, engineering prototypes, and design tool costs.

The decrease in research and development expenses for the three and nine months ended June 30, 2023, as compared with the corresponding periods in fiscal 2022, was primarily related to a decrease in headcount-related expenses.

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.

Selling, General, and Administrative

Three Months Ended Nine Months Ended

2023 Change July 1,

2022 June 30,

2023 Change July 1,

Three Months Ended

December 29, 2023 Change December 30, 2022

(dollars in millions)

2 unchanged sentences

Selling, general, and administrative expenses include legal and related costs, accounting, treasury, human resources, information systems, customer service, bad debt expense, sales commissions, share-based compensation expense, advertising, marketing, costs associated with business combinations completed or contemplated during the period, and other costs.

Selling, general, and administrative expenses for the three months ended June 30, 2023 were consistent with selling, general, and administrative expenses for the corresponding period in fiscal 2022.

The decrease in selling, general, and administrative expenses for the nine months ended June 30, 2023, as compared with the corresponding period in fiscal 2022, was primarily related to a decrease in headcount-related expenses, including share-based compensation.

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.

Amortization of Intangibles

Three Months Ended Nine Months Ended

2023 Change July 1,

2022 June 30,

2023 Change July 1,

Three Months Ended

December 29, 2023 Change December 30, 2022

(dollars in millions)

1 unchanged sentence

% of net revenue — % 1.6 %

The decrease in amortization expense for the three and nine months ended June 30, 2023, as compared with the corresponding periods in fiscal 2022, was primarily due to reaching the end of the useful lives of certain intangible assets that were acquired in prior fiscal years.

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.

Restructuring, Impairment, and Other Charges

Three Months Ended Nine Months Ended

2023 Change July 1,

2022 June 30,

2023 Change July 1,

Three Months Ended

December 29, 2023 Change December 30, 2022

(dollars in millions)

2 unchanged sentences

% of net revenue 1.4 % — %

The increase in restructuring, impairment, and other charges for the three months ended June 30, 2023, as compared with the corresponding period in fiscal 2022, was primarily due to employee severance costs.

In addition to the aforementioned factor, the increase in restructuring, impairment, and other charges for the nine months ended June 30, 2023, as compared with the corresponding period in fiscal 2022, was primarily due to impairment charges on divested assets.

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.

Interest Expense

Three Months Ended Nine Months Ended

2023 Change July 1,

2022 June 30,

2023 Change July 1,

Three Months Ended

December 29, 2023 Change December 30, 2022

(dollars in millions)

1 unchanged sentence

% of net revenue 0.8 % 1.3 %

The increase in interest expense for the three and nine months ended June 30, 2023, as compared with the corresponding periods in fiscal 2022, was due to an increase in the variable interest rate associated with the borrowing on the Term Loans.

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).

Provision for Income Taxes

Three Months Ended Nine Months Ended

2023 Change July 1,

2022 June 30,

2023 Change July 1,

Three Months Ended

December 29, 2023 Change December 30, 2022

(dollars in millions)

1 unchanged sentence

% of net revenue 1.7 % 3.1 %

We recorded a provision for income taxes of $26.3 million (which consisted of $ 17.5 million and $ 8.8 million related to United States and foreign income taxes, respectively) and $94.6 million (which consisted of $ 60.0 million and $ 34.6 million related to United States and foreign income taxes, respectively) for the three and nine months ended June 30, 2023, respectively.

The decrease in income tax expense for the three and nine months ended June 30, 2023, as compared with the corresponding periods in fiscal 2022, was primarily due to lower income from operations, partially offset by a current period shortfall in tax deductions for share-based compensation, compared to windfall deductions in the prior year.

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.

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.

LIQUIDITY AND CAPITAL RESOURCES

Nine Months Ended

(in millions) June 30,

Three Months Ended

(in millions) December 29, 2023 December 30, 2022

Cash and cash equivalents at beginning of period $ 718.8 $ 566.0

5 unchanged sentences

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 $302.5 million increase in cash provided by operating activities during the nine months ended June 30, 2023, as compared with the corresponding period in fiscal 2022, was primarily related to favorable changes in working capital of $695.5 million, due primarily to a decrease in accounts receivable.

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.

Cash used in investing activities:

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 $85.4 million decrease in cash used in investing activities during the nine months ended June 30, 2023, as compared with the corresponding period in fiscal 2022, was primarily related to a decrease of $207.5 million in cash used for capital expenditures, partially offset by an increase of $118.0 million in the net purchase 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.

Cash used in financing activities:

Cash used in financing activities consists primarily of proceeds and payments related to our long-term borrowings and cash transactions related to equity.

The $7.5 million decrease in cash used in financing activities during the nine months ended June 30, 2023, as compared with the corresponding period in fiscal 2022, was primarily related to a decrease of $631.2 million in stock repurchase activity, a decrease of $51.6 million related to the minimum statutory payroll tax withholdings upon vesting of employee performance and restricted stock awards, partially offset by an increase of $650.0 million for the repayment of debt, and an increase of $23.0 million in dividend payments.

Cash, cash equivalents, and marketable securities totaled $739.5 million as of June 30, 2023, representing an increase of $152.7 million from September 30, 2022.

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.

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.

We have outstanding $500.0 million of Notes Due 2026 and $500.0 million of Notes Due 2031 (the “Notes”).

As of June 30, 2023, there were $500.0 million of borrowings outstanding under the Term Credit Agreement.

The Term Credit Agreement expires July 26, 2024.

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 June 30, 2023,

there were no borrowings outstanding under the revolving credit facility (the “Revolver”).

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.

During the three months ended June 30, 2023, we repaid $500.0 million of Notes Due 2023.

In addition to the repayment of the Notes Due 2023, during the nine months ended June 30, 2023, we repaid $200.0 million of outstanding borrowings under the Term Loans.

Based on our historical results of operations, we expect that our cash, cash equivalents, and marketable securities on hand, the cash we expect to generate from operations, and funds from our Revolver, will be sufficient to fund our short-term and long-term liquidity requirements primarily arising from:

5 unchanged sentences

money market funds, U.S.

Treasury securities, agency securities, corporate debt securities, and commercial paper.

Treasury and government securities, and corporate bonds and notes.

Our contractual obligations disclosure in the 2023 10-K has not materially changed since we filed that report.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements