The most important thing in the SWKS report

This is paraphrased from the Conference Call:

Turning to our June quarter, we expect revenue to be $800 million, up 36% year-over-year. At this revenue level, we anticipate gross margin to be 48%, representing a sequential increase from 46.7%, and that’s driven by a combination of growing adoption of our products, increasing global scale, and enhanced vertical integration and our ongoing operational initiatives. These factors have created new baseline for our business model, providing a path to continued margin improvement ahead. And all of this puts us on a firm path towards our target of at least 50% gross margin for the company.

This is crucial!!! The doom and bloomers say, “This is a chip company. Their fate is to be commoditized and have their margins squeezed to nothing.” Margin expansion means that that is clearly not happening!



Well said Saul.

Also this:

We recommend modeling 52% incremental gross margin, providing a path to continued margin improvement. Longer-term, we are targeting a goal of a 50% gross margin for the Company, and we have a number of initiatives in place to accelerate our progress towards achieving this goal. All of this gives us a high confidence level in our ability to extend our track record of best-in-class financial results, putting us on a path toward our goal of $7 in annualized EPS over the long term.

I think it was only last summer they said their goal was $5.


1 Like