Good afternoon, and welcome to Skyworks Solutions' third quarter fiscal year 2018 earnings call. This call is being recorded. At this time, I will turn the call over to Mitch Haws, Vice President of Investor Relations for Skyworks. Mr. Haws, please go ahead.
Thank you, Gary. Good afternoon, everyone, and welcome to Skyworks' third fiscal quarter 2018 conference call. With me on the call today are Liam Griffin, our President and Chief Executive Officer, and Kris Sennesael, our Chief Financial Officer. Before we begin, I would like to remind everyone that our discussion will include statements relating to future results and expectations that are or may be considered forward-looking statements. Please refer to our earnings press release and recent SEC filings, including our annual report on Form 10-K, for information on certain risks that could cause actual outcomes to differ materially and adversely from any forward-looking statements made today. Additionally, the results and guidance we will discuss include non-GAAP financial measures consistent with our past practice. Please refer to our press release within the investor relations section of our company website for a complete reconciliation to GAAP.
With that, I'll turn the call over to Liam.
Thanks, Mitch, and welcome everyone. The Skyworks team produced solid results once again in Q3. We generated revenue of $894 million above consensus estimates. We expanded gross margin to 50.9%, up 20 basis points, both sequentially and year-over-year. We delivered record Q3 earnings per share of $1.64, $0.05 better than our guidance. Finally, we continue to deploy our cash to create shareholder value, returning nearly $300 million during the quarter through share repurchases and dividends. From a market perspective, we are entering the seasonally strong second half, while on track for another year of record financial performance. Based on our Q4 outlook, we will end the fiscal year with mid-single-digit revenue growth, greater than a 10% EPS increase, and record cash returns. This despite a choppy market backdrop and a government-imposed trade ban on a sizable Chinese customer.
Our confidence is underpinned by our product expansion and reach, spanning premier mobile and broad market accounts. For example, during the quarter, we commenced production of access solutions for Cisco, captured content in Linksys' new dual-band mesh networks, ramped connectivity engines for Amazon's 4K Fire TV, a leading voice-enabled streaming media platform. Partnered with Sierra Wireless on LTE Cat 12 data cards for M2M applications, deployed networking solutions supporting AT&T DirecTV gateways, extended our footprint across Nest home automation platforms, enabled LTE telematics at GM and BMW, and we introduced high-precision GPS functionality, improving ride-sharing, mobile payment, and fleet management services. We also secured strategic flagship wins at Huawei, Samsung, Oppo, Vivo, LG, and Nokia. In our infrastructure markets, we powered massive MIMO solutions for a leading European base station supplier.
In summary, we continue to expand the aperture of a design win pipeline spanning mobile, IoT, and a broadening set of diverse end markets. With IoT, the rapid proliferation of volumes represents a significant growth opportunity for Skyworks. Ericsson, for example, estimates that there will be 29 billion connected IoT devices by 2022. At the same time, 5G is upon us. The dramatically higher speeds and lower latency enabled by 5G will catalyze a wide range of usage cases, from the connected factory to the autonomous car to artificial intelligence. In order to make the leap to 5G, system architectures require significantly more powerful connectivity engines to ensure performance hurdles are overcome. Skyworks is leveraging our deep systems knowledge, strategic partnerships, and formidable investments to accelerate the deployment of 5G, with our Sky5 platform providing end-to-end performance across this critically important new spectrum.
To that end, we reached key milestones this past quarter, including the launch of our Sky5 antenna tuning portfolio. Our newest 5G solutions deliver enhanced bandwidth coverage from 60 MHz to 6 GHz. This is an enormous and incremental source of content growth for Skyworks, as the number of antennas increase substantially across 5G engines. In addition, last quarter, we successfully demonstrated our proprietary, fully integrated Sky5 sub-6 GHz engines supporting new 5G NR radios across frequency bands n77, n78, and n79. Quite simply, Sky5 is enabling new 5G networks and facilitating ubiquitous wireless connectivity for both people and things. I will now turn the call over to Kris for a discussion of last quarter's performance and our financial outlook.
Thanks, Liam. Revenue for the third fiscal quarter of 2018 was $894 million, exceeding consensus estimates. Gross profit was $455 million, with gross margin at 50.9%, up 20 basis points sequentially as well as year-over-year. Third quarter operating expenses were down sequentially to $130 million. As a result, we generated $325 million of operating income, translating into an operating margin of 36.3%.
Our tax rate was 8.9% in the quarter. Net income was $300 million, translating into $1.64 of diluted earnings per share, exceeding our guidance by $0.05. Turning to the balance sheet and cash flow. Third quarter cash flow from operations was $258 million, and CapEx were $191 million, supporting further revenue growth in the second half of the calendar year, as well as the necessary technology investments for emerging 5G opportunities and IoT markets. Dividends paid were $58 million, and we repurchased 2.5 million shares of our common stock for a total of $240 million, bringing our total share repurchases this fiscal year to over 5 million shares. In fact, in fiscal 2018, we have returned essentially all of our free cash flow back to the shareholders through our share repurchase program and dividend payments.
We entered the quarter with a cash and investment balance of over $1.6 billion and no debt. Now moving on to our outlook. For the fourth fiscal quarter, we expect revenue to be up 11%-13% sequentially, or $1 billion at the midpoint. We anticipate further gross margin expansion, with fourth quarter gross margin between 51%-51.5%. We expect operating expenses in the fourth quarter of $135 million. Below the line, we expect roughly $4 million in other income, a tax rate of 9%, and a diluted share count of 182 million shares. Accordingly, at the midpoint of these ranges, we plan to deliver diluted earnings per share of $1.91, up 16% sequentially. Finally, today we also announced a 19% increase in our quarterly dividend to $0.38 per share, reflecting our confidence in Skyworks' business model and sustainable cash generation capabilities.
With that, let me turn the call back to Liam.
Thanks, Kris. As our results and outlook demonstrate, Skyworks continues to financially outperform, driven by content-rich design wins covering a number of strategic customers and applications, increasingly strong momentum in broad markets, world-class operational execution and scale, our Sky5 platform enabling the 5G applications of tomorrow. Decades of experience in developing innovative solutions over successive technology generations. Finally, superior cash flow performance, allowing us to out-invest our competition while providing premium returns to our shareholders. That concludes our prepared remarks. Operator, let's open the line for questions.
All right, thank you. Ladies and gentlemen, if you'd like to ask a question, please press star then one on your touchtone phone, given time constraints, please limit yourself to one question and one follow-up. Our first question comes from Craig Ellis from B. Riley FBR. Please go ahead.
Thanks for taking the question, I'll just start with a clarification for you, Kris. Kris, could you help us with the segment breakouts in the fiscal third quarter? As we look at the guidance for the 11% sequential growth in the fourth quarter, can you provide some color on how the segments can perform within that?
Yes, Craig. Broad market in Q3 was approximately 30% of total revenue. It was actually slightly above 30%, mobile was approximately 70% of total revenue. Speaking about the broad market, we continue to see really nice growth there. We are growing in the low to mid-teens year-over-year, we are now at a $1.1 billion annualized revenue run rate. We see really good strength there across the board, especially the IoT segment that's including the connected home, the connected car, machine-to-machine industrial applications, some consumable applications. In addition to that, we also see some really good traction there on the infrastructure segment. Broad market is doing really well.
The second part of that clarification question was the fourth quarter. Would you expect broad markets to continue to grow in the fourth quarter? Historically, it's been up in some quarters, down in others.
No, we definitely expect strong sequential growth in broad market into the fourth quarter, continue on that low to mid-teens year-over-year growth.
Thank you. Now to line of Mike Burton from Benchmark. Please go ahead.
Great. Thanks for taking my questions, congrats on the results. First on the China business, can you talk about how your Chinese OEMs fared in the June quarter, then update us on the size of that group relative to revenues and thoughts about how we should be thinking about the momentum of that business in the second half of calendar 2018?
Sure. Yeah. Q3, actually, China fared pretty well despite some of the choppiness in the market and the specter of trade dynamics, et cetera. We were able to put up some sequential growth into Q3. If we look at China for Skyworks, it's about 25%-30% of revenue. Of course, China for us is mobile. There's infrastructure, there's IoT, there's many parts. It's been a great region for us to play emerging markets, right? A number of our players in China, Oppo, Vivo, Xiaomi, et cetera, they also deliver globally to some of the most emerging places. We're interested in that, and we benefit from that. Should also note that we have a very diverse set of baseband partners that help us deliver in China. Within Huawei, we've got their HiSilicon product, we've got partnerships with MediaTek, we attach to Intel, we attach to Qualcomm.
We've got all the bases covered, and our position there is solid.
Great. Then, on margins, last quarter you talked about progress towards the 53% target on the second half with some cost initiatives to kick in. It looks like based on the guidance, it's going to be dropping down about 54% or 55% next quarter. Some progress there, but can you just update us on your latest thoughts about some of those cost initiatives and maybe a timeline for when we could get closer to that target? Thanks.
Right. From a gross margin point of view, I'm pleased with the progress that we continue to make. In the June quarter, Q3, we were up 20 basis points sequentially as well as 20 basis points year-over-year. For Q4, we just guided 51% to 51 and a half%, which is up 10-60 basis points sequentially. At the midpoint, up 35 basis points. We continue to make really good progress towards our target model of 53%.
Thank you. Now to the line of Ambrish Srivastava from BMO. Please go ahead.
Hi. Thank you very much. Kris, maybe I'll start with you. Good progress, good follow through on the capital allocation via the divvy increase. I was just a little puzzled, and I was hoping you could answer these questions is, free cash flow came down a lot this quarter, and thanks largely to AR being up a lot as well as inventory. Could you just help us understand what are the dynamics there? Also kind of related to that is, CapEx was up a lot, and you mentioned capacity as well as new investments. Does that mean that CapEx would be higher than what you had earlier guided to? Then I had a quick follow-up for Liam, please.
First of all, we have a very strong cash generation business model, and that continues to be very strong. Obviously, there are going to be some seasonal fluctuations, and typically Q3 is somewhat of the softest cash generation quarter, in part because inventory is going up both in $ as well as days of inventory as we are in anticipation of a strong ramp in the September and December quarter. Also from a receivables point of view, we saw an increase of the receivables both in absolute $ as well as DSOs because of the seasonality. Typically, in the April and May months, you still have a seasonal decline, then it flips over and starting in June, you see the start of the seasonal increases.
As a result of that, Q3 was, from a billings point of view, somewhat back-end loaded, and as a result of that, you see slightly higher DSO, slightly higher AR, and it has somewhat of a muted impact on the cash generation within the quarter. If you look at it from a LTM point of view, we continue to generate very strong cash from operations as well as free cash flow. Having said that, CapEx in the quarter Q3 was $191 million, it was definitely a heavy CapEx quarter. Again, all or most of the CapEx there is related to capacity expansion in preparation of the steep ramp that we have in front of us here in the September and December quarter, as well as some technology-related investment as we continue to be a technology leader and expand our capabilities there as well.
Okay, thanks. Clearly no lack of confidence because you are raising your divvy up a lot. I just wanted to make sure I understood the dynamics. For Liam, just on the third calendar quarter, when you look at the mobile and the trends that you're seeing there, I don't even know if there's such thing as seasonal anymore, how would you characterize the environment? This is somewhat seasonal, more or less worse than that or better than that? Thank you.
Sure. Yeah. You're saying the third calendar quarter. The third calendar quarter, we start to see this time of year preparation for some pretty sizable ramps with premier customers. That work is ongoing. We are very comfortable in our ability to move content up and actually expand the reach of our content. That's even more important. We're bringing more technologies, higher grade functionality to really lift connectivity, improve data rate, reduce latency, manage some of the more intricate designs on our DRx platforms, bringing in MIMO architecture, just really bringing those rich solutions to our customers. We're in the very early innings of those ramps. Again, calendar Q3, then moving into the calendar Q4 where the numbers should come up again. That's how it's playing out right now. We have very good visibility on this as well.
All right. Thank you. Now to line of Craig Hettenbach of Morgan Stanley. Please go ahead.
Yes, thank you. Can you discuss in terms of how you're thinking about guidance just with the ZTE ban recently lifted, how that's incorporated or not into the September quarter?
Yes. Our business with ZTE was approximately $25 million-$30 million per quarter. That was not there in Q3 in the June quarter. In the meantime, the ban has been lifted, which is good news. However, it will take time for ZTE to rebuild their supply chain. That could take multiple months, if not multiple quarters. We do expect a little bit of revenue related to ZTE in Q4, but it's just a couple of million dollars.
Okay. Thanks for that. Then just as a follow-up on capital allocation and just to step up noticeable uptake in buyback, increase in the dividend. Liam, can you talk about that move in the context of how you're also viewing M&A opportunities?
Sure. Absolutely, Craig. Fortunately, the cash machine and the Skyworks engine is continuing to do well. The market backdrop is, I believe, very favorable for us, and we understand mobile. There's a lot of great stuff happening there. We're advancing the technology, expanding the reach, as I mentioned, and making some really strategic investments. We also have 5G upon us, which is going to be an incredible opportunity for Skyworks and our ability to do the complex things well. In parallel, we talked about broad markets in double digits. There's a lot of really meaty opportunities on the table today with the current business. Having said all that, we're fortunate to have the cash generation, the balance sheet, and the powder to do acquisitions when they make sense.
We'll continue to look at that, and we have been looking at it, but we will continue to have a very high bar and a great deal of vigilance on transactions if we go forward. That's the best way I can frame it for you today, Craig.
Thank you. Now to the line of Blayne Curtis from Barclays. Please go ahead.
Yes, thanks very much, Justin. Liam, I wanted to ask you mentioned the wins at a number of OEMs in China. Just kind of curious, as you look at basic or just the addition of carrier aggregation in China, your competitiveness with SiGe versus BAW-based solutions, does that becomes a bigger part of the mix over the next few years?
Sure, Blayne. I think, if you look at China, as I mentioned, we've been working that region for years and have great partnerships and relationships and some incredible success stories with some of the leading players. As I mentioned earlier, again, baseband partnerships, agnostic, we're able to play all the angles. As we start to move into extending into 5G, where China's going to be a big player, there are going to be some new opportunities that are going to require unique filtering, expanding carrier aggregation, much greater focus on downlink data rates and speeds, which we do well with our DRx. The other thing is that the ability to solve those problems can be different depending on the supplier, depending on the customer's needs.
What we bring to the table is really that high degree of configurability where we can go in and lever SiGe, we can lever our DRx, we can lever our homegrown gallium arsenide and our packaging to create really unique solutions so each customer gets exactly what they want and only what they want. As you know, in China, you have more of a kind of a proliferation of models rather than one or two flagships that serve global markets. The ability to work with each customer and get it right based on their needs is really important, and that's what we intend to do, and I think it gives us a chance to really exceed our numbers here as we get into 2019 and beyond.
Thanks. This may be a hard question for you to answer, then I'll ask it anyway. Just curious on the marquee ramps, as you kind of compare this year, the timing of those ramps versus the last couple of years. Obviously, last year was a little bit different than the previous five years before that. I'm just kind of curious, as you look at the September guide, how it kind of compares with that marquee ramp.
You're referring to the large customer ramp, is that right, Blayne? I think I'll assume that's what it was. What we're seeing right now for ramps going through the second half of the calendar year following a predictable cycle. Obviously, there'll be some production that we need to put forth now, which we are doing to support our larger customers for those ramps. What we see today, just on the outlook and the projections, things seem to be tracking the normal cycle, and we'll be prepared to deliver to that.
All right. Thank you. Now to the line of Harsh Kumar from Piper Jaffray. Please go ahead.
Yeah. Hey, guys. First of all, congratulations. Volatile market, solid results by you guys. At your largest customer, Liam, I was curious if this new generation of phones has a content increase that's built in, and I'm curious if you could talk about maybe generally speaking, if you saw a content increase and if you did, what kind of category would you put that? Double digits, single digits, just broad color. Then I have a follow-up.
Yeah. I can't get into too much detail, Harsh, but obviously, it's our mission every cycle to bring a greater level of technology and performance and value to our customers, and I'm confident that that's happening again here now. With the burden on mobile technology and the requirements continuing to stretch and become more daunting, it's great for Skyworks. We talked about that. We have such a wide set of technologies from Bluetooth to Wi-Fi to LTE, GPS, DRx, all throughout mobile. The ability to create diversification across platforms is a big reason While we're able to raise content every year. Some of the new technology nodes that are upon us now, 5G, et cetera, they're not in the numbers today, but we're working on it now.
We've got the blueprints and the prototypes in our labs to move forward there and be positioned for the 2019, 2020 and beyond ramps in 5G.
Understood. Then for my follow-up, I think you said in the last call that you expected three Q calendar, which is the September quarter to be up, and then you expected four Q calendar, which is the December quarter, to be up again. Is that still kind of accurate, Liam, in your opinion? Is that the way it shakes out this year?
Yes, absolutely. That's right.
Thank you.
Thank you. Now to line of Vivek Arya from Bank of America. Please go ahead.
Thanks for taking my question. Maybe first one for Kris on CapEx. I don't recall, Kris, whether you gave the number for Q4 and then, as part of that, is 10% still a good assumption to use for CapEx for the next one or two years?
Yeah, absolutely. If you look even on a LTM basis, we are approximately 10% CapEx to revenue. There is some seasonality, right? Some quarters are higher, other quarters are lower. If you look at it on a full year basis, this year and even the next couple of years, on or about 10% CapEx to revenue is a good number.
Got it. Then, Liam, as we look at the back half, as I look at your September quarter outlook and maybe assuming December is kind of seasonal, do you expect mobile sales to be up year-over-year? Because if content is up, is it just that we are still working through some of the unit fluctuations? At what point should we start to see your mobile sales start to grow year-over-year?
That's definitely in the cards for us here. We're not guiding December on this call, right? We're just not able to go out another quarter with you. We are gaining content. We are seeing our reach of technology expand, as I mentioned. We do expect a solid sequential into December. We haven't finalized exactly what that number is, but we absolutely expect that to be in place, and it will be up year-over-year as well if we follow through with a solid sequential. That's the best we can do today, but we feel good about making that happen.
Thank you. Now to line of Krysten Sciacca from Nomura Instinet. Please go ahead.
Good afternoon. Thanks for taking my question. First question I have is a little broader. We've seen your major North American customers starting to reevaluate their BOM and try and minimize it as much as possible and just given the history that we've seen with other Chinese OEMs almost kind of mimicking what this North American customer does, do you expect to see this trend flow through at Chinese OEMs, or do you think that content is still increasing there?
What we are seeing in the Chinese OEMs is today, at face value, the content vis-à-vis some of the larger players, the larger global players, the China opportunities are just lower in dollar value. They've been increasing, but you may have an LTE product that has $4-$5 of content that potentially can move to $6-$7, and we pursue that. If you look at the more significant players that lead the market, the content opportunity is much higher. If anything, if we could get some of the mid-tier China brands to mimic more of the one and two players in the industry, that would be good for us. It's a little bit of a back and forth there. Again, in China, they don't often sell a fully global roaming product.
If it's roaming just on China Mobile, China Unicom, for example, it doesn't necessarily need the same frequency bands that a global model would need. There's differences regionally, but we honestly see the need in every case for performance and products are selected and customers' decisions are really based on how well the product will perform in their application, not so much on how much does it cost.
That's great. Thank you.
Sure.
For my follow-up, sticking on the topic of China, I know the tariffs recently have kind of affected everyone a little bit differently. How do you expect that to affect your business operations, if at all? Or do you fear any retaliation from China will affect your business outlook?
No. We have seen very little impact or no impact from the trade war on our business, with the exception, of course, of the export ban with ZTE, where we lost revenue in Q3 and Q4. The ban has been lifted, but it will take some time to recuperate that revenue. If you look at the trade war and the tariffs, right, we are an exporter of components from the U.S., from Singapore, from Mexico into China and many other countries. There are no new import duties or tariffs on those components, that doesn't impact us at all. It's definitely something that we will keep evaluating and see if there are any new developments, for now, we don't see any impact on our business.
Thank you. Now to the line of Timothy Arcuri from UBS.
Thanks so much. Kris, it looks like in December, it looks like based upon your guidance, you're going to grow maybe $15 million sequentially in the third calendar quarter. If that includes only a few million dollars of ZTE, if I put that back, then it would suggest that the broad markets business is growing in excess of 20% year-over-year. Are there some one-timers in September, or is that really the right sort of year-over-year growth rate going forward? Thanks.
No, again, we can probably take this offline on the math. What I see here is that broad market in Q3 and in Q4 fiscal calendars, is growing at that low to mid-teens year-over-year.
Okay. Then can you talk a little bit about the competitive environment? Are you seeing Qualcomm be sort of any more of a player? They now seem to have all the pieces with TDK JV and Winsemi and stuff. Do you see them at any of your major accounts? Thank you.
Yeah. The Qualcomm mobile situation, look, we respect Qualcomm. They're a great technology player and have been in mobile for a great deal of time. If we look at the landscape today on programs that we've been pursuing and programs that we're already in, we haven't seen a significant effect. Let me also remind you that there's a number of platforms where our RF and our other chipsets will line up right next to the Qualcomm baseband. We do have an ability to be a part of their system with our product, but their fully integrated solutions, we haven't seen too much of that, and none of that really has impacted our revenue growth.
Thank you. Now to the line of Tristan Gerra from Baird. Please go ahead.
Hi, good afternoon. I know you can only comment as much about ramp in North America for the second half. Are you seeing, in general, a departure of the typical band or frequency range that you've been previously, or up to now in smartphones with the new design wins that you have for the second half? Also, any commentary around potential shift in market share that you see driving this guidance, which is the strongest sequential revenue growth for the past four years for the quarter?
Sure. Yeah. Well, we continue to see very rich content opportunities put forth with the leading players in the industry, and that's a theme that's continued for successive generations. Bands can be added as customers want to get more reach with their customer base. That happens. The important thing is, the more dense you get with technology, the more bands that you bring into an application, bringing in downlink opportunities on DRx and uplink opportunities on SkyOne. Now thinking about getting into 2019 and 2020, where we have unique 5G opportunities that are not yet resolved. It's going to put a tremendous amount of pressure on systems performance, and a great opportunity for those that can deliver. That's what we're looking at. With respect to the last quarter here that we just spoke about or the guide into Q4, we're very well prepared for it.
We certainly had good visibility on the designs that were required to make these numbers happen, and it's about execution right now, and that's what we've been doing for years. We're looking forward to executing to the ramp and also following up over the next several years as we bring 5G to the market.
Okay, great. As a quick follow-up outside of North America, do you see any pocket of inventories in the smartphone supply chain, or would you say that we're at normal level relative to this time of the year?
Yeah, we're absolutely at normal levels for this time of the year.
Great. Thank you.
Thank you. Now to the line of Atif Malik from Citigroup. Please go ahead.
Thank you for taking my question and congratulations on consistent execution and the dividend hike. First question for Liam on 5G. You guys have a very strong portfolio with Sky5. Can you just talk about when should we expect a significant revenue ramp in your 5G products? I think in the past you guys have talked about double-digit growth in fiscal second half 2019. Is there any update on when should we expect the significant ramp in 5G sales?
Great question. The work is underway right now, and I'm really proud of our team's ability to get in front of this, and become one of the first movers in 5G, and we're thrilled to be in that position. What we're seeing today is a lot of design activity on both the infrastructure side and also on really kind of the heartbeat of the connectivity within smartphones. We think, again, you can get different answers, but we see revenue really being posted probably by 2020, maybe late 2019, but 2020 is where I think kind of we triangulate around real revenue. Of course, to get there's a lot of development work required, and our teams are working with our customers and baseband providers and very close to the infrastructure side to make sure that all of this great technology comes together efficiently.
I'll also note, as Kris mentioned, we're making strategic capital investments that are unique to executing in a 5G world. Very complex products that we want to make ourselves. That's what we're looking at. Again, we've had some trials and some testing with some of our 5G solutions already. Things look good. We're going to continue to refine and again, continue to be in position to deliver at scale when these products come to market.
Great. Then as a follow-up, can you provide an update on your in-house BAW program, and if you've moved into some manufacturing?
Sure. Actually, I don't want to share the playbook on that technology right now. I think you know us pretty well. We have some very crafty designs that will allow us to address all the necessary frequency bands in both LTE and 5G. The work right now is progressing very well. We'll give you more on that soon.
Thank you. Now to the line of Bill Peterson from JPMorgan, please go ahead.
Yeah, thanks for letting me ask a question. I want to ask a question on mobile, a bit differently than others. If you look at the mobile business in the September quarter, it looks like it's basically flat or slightly down from a year-on-year perspective. If you can break out the content gains versus maybe unit demand weakness amongst the large North American, Korean players in China, where are you seeing, let's say, the content gains versus maybe the unit demand weakness and so forth that brings it to relatively flat or slightly down? Thank you.
Yeah. We'll try to unravel that the best we can. Certainly, China is okay, we're not seeing it as robust as we would've expected. Okay. This is all in the billion-dollar number here. We thought that would be a little bit better. It isn't. Some of that is ZTE, which is real, right? We talked about that, $25 million-$30 million a quarter, that's out. Samsung hasn't been as strong as other large accounts. They're okay, we haven't seen the uptick there that we thought we could enjoy. Some of that is really a choice that we've made in certain cases to not chase commodity business, I think that serves us well. The larger customers in mobile are continuing to advance the technology, I think all that kind of plays together.
There is a bit of a unit issue, too, that jumps around, as you all know that with any customer's product ramp, it doesn't move 100% to one device. There's a roll-in, phase in, phase out. You always have a combination of new product, prior year model, maybe a year back model, and that's the case with all of our customers. Things don't react in such a binary way. The content acquisition is what we drive, I'm pleased with the team's ability to make that happen.
Okay. Thanks for that color. Switching over to broad markets. I think infrastructure has just generally been kind of a weaker portion of your business and a lot of other people in the markets business. Now you're talking about these MIMO opportunities, you're speaking more about infrastructure being a growth opportunity. I'd like to understand what regions you're seeing strength, maybe if you can help us size these MIMO opportunities. I believe you've talked about a $65 plus content opportunity, if you could help size these opportunities in the infrastructure market. Thank you.
Yeah. A lot of that is in these high-performance antenna arrays and base stations. These are new functions that are required to make 5G work. You do have kind of a slow roll on infrastructure now with this catalyst to move to 5G and upgrade cycles that will drive 5G. We're also seeing a pretty nice step up in small cell infrastructure, small cell base stations, that can happen. If you look really long into 5G, we could get into the millimeter wave technology, which we have in-house, start to see kind of neighborhood-level deployments that will incorporate small cell-like functionality but use millimeter wave technology. That's out there a bit, all of that is kind of in our strike zone.
Thank you. Ladies and gentlemen, that does conclude today's question and answer session. I'll now turn the call back over to Mr. Griffin for any closing comments.
Thank you all. I appreciate your time this afternoon. Look forward to seeing you at conferences going forward.
Thank you. Ladies and gentlemen, that does conclude today's conference call. You may now disconnect.