Operator: Our next question coming from the line of Gary Mobley with Wells Fargo.
Gary Mobley: I want to start with a quick housekeeping question. What was the mix of revenue from your largest customer in the quarter?
Kris Sennesael: The largest customer was approximately 73% of total revenue which is high, obviously, because the December quarter is the top quarter with the largest customer. And given that the broad markets was bottoming out in December, you get to on or about 73%. Obviously, when you look forward on full year basis or even in March, it will be well below the 73%.
Gary Mobley: I want to ask Ed’s previous question and perhaps a more direct way. Doing the math, it would indicate that your Android-related mobile customers are trending now at about a $400 million annualized rate or at least that was the case for the December quarter. But in the past, fiscal year ’22, I believe that level is closer to $800 million. And so my question is, if we see a rebound in the Android market. And based on your design win footprint that you currently have today, can we expect that segment of your business to bounce back to the previous level?
Liam Griffin : Yes, absolutely. We’ve got, as I said, a lot of opportunity to go harder and stronger and more direct on the Android ecosystem. We absolutely have technology to make it work. We have the scale manufacturing scale and know how to get it done. So yes, I mean, it’s certainly a play for us there, and I think we’ll take advantage.
Operator: Our next question coming from the line Karl Ackerman with BNP Paribas.
Karl Ackerman: Two questions, if I may. On mobile, your largest customer is down on a seasonal basis in March. But at the same time, given your improving execution within Android, does Android grow sequentially in March? How do we think about that within mobile, please? And I have a follow-up.
Kris Sennesael: Yes. Android is kind of flattish, slightly up into March.
Karl Ackerman: Got it. At the same time, I do want to touch on mobile. One more time. It’s been asked in several different ways, but I guess I’ll try it again. You are less tied to China MPRS. But are you seeing any changes to the competitive landscape in China. I ask because there are anecdotes supporting China RF suppliers winning content in low band saw and TC-SAW. But at the same time, as you indicated earlier, Kris, you’re not necessarily competing in that particular on the market. So if you can just highlight the committed landscape and what you’re seeing in China that would be very helpful.
Liam Griffin : Yes. I mean the OVX players, we do some reasonable business there. We could probably do a little bit more on the Android side, but we really don’t step down much further there. We’re not in the low end at all. We could be, but I think we generate a better outcome for our customers and our shareholders to drive that mid and high end. So it’s something we can do. But I think the way our business runs, I think, we’re more accretive as a company going down the playbook that we have today.
Operator: Our next question coming from the line of Vivek Arya with Bank of America Securities.
Blake Friedman: This is Blake Friedman on for Vivek. I just wanted to focus on OpEx, it seems spending has returned to levels seen prior to the industry downturn. So I was curious how we should think about the trajectory of OpEx for the remainder of the year.
Kris Sennesael: Yes. So as it relates to OpEx, I think we did a good job in the December quarter at $191 million we are guiding with a little step-up in March to $195 million. Keep in mind that this is the start of a new calendar year. And so you get a reset of the social charges and some of that, that kicks in. In addition to that, we are going to continue to invest in our technology and product road maps. We feel good about our position with our mobile players. As Liam articulated, we have plenty of opportunity in our broad markets. And we’re going to continue to invest. Now we’re going to do it the Skyworks way. We focus on efficiency, effectiveness. We’re not wasting any dollars here. And so — but yes, we’re going to continue to invest. And so OpEx will continue to gradually move up in the remainder of the fiscal and calendar year.
Blake Friedman: Got it. And then kind of quickly circling back on some of your comments. I know the broad markets business is a key initiative for Skyworks. And just with the business kind of returning to this cash positive level and generating pretty strong cash flow from here. Just curious how you think about M&A and anything in particular you guys would look to add to the broad markets assets?
Kris Sennesael: Yes. First of all, the cash flow is outstanding, and it’s definitely something that we focus on. And so we generate a ton of cash. As you have seen in the last couple of quarters, we have used that cash flow. Of course, we continue to invest in the business. We pay our dividends every quarter. And we have been paying off the term loan that, as you probably know, had a variable interest rate and was getting a little expensive there. But we are done with that. And so now, again, looking forward, we have — we will continue to drive a very strong free cash flow. It’s not going to be every quarter 63%. We feel we have a sustainable plus 30% free cash flow margin on a fiscal or calendar year basis. But that’s generating a lot of cash.
And of course, we want to put that cash to work we have optionality. We can switch on the buybacks or we can be active from an M&A point of view. And as you know, we — yes, we focus on becoming a more diverse company despite the fact that we like the mobile business, but we focus on becoming a more diverse company in part through organic investments in that business but we have the optionality to accelerate through M&A, and we’re working that.
Operator: And our next question coming from the line Thomas O’Malley with Barclays.
Thomas O’Malley: I just wanted to understand the underutilization charges into the March quarter. Obviously, gross margin being guided down slightly. But you’re seeing broad market step-up. So that mix should help you. Where are you seeing more of those underutilization charges? Are those as a percentage basis coming more on the mobile side or more on the broad market side?
