Matt Ramsay: Got it. Thank you for that. I guess my follow-up question is one for Akash, first of all, Akash, congratulations on the new COO hat. Well done. But my question is around margins. And I noticed that even with the IoT business down dramatically, there was some improvement in sequential gross margin in the quarter and back above 30% in QCT operating margins. So maybe you could discuss some of the moving parts with margins in the business because it was a — pleasantly a bit better than I had modeled, and I kind of want to see what might be sustainable or what actions you took on a go-forward basis on both the gross and the operating side. Thanks.
Akash Palkhiwala: Thank you, Matt, and thanks for our wishes. I’m looking forward in this new role to working with Cristiano and the executive team to kind of deliver on our long-term priorities. And of course, I’ll continue to remain committed to my CFO role, working closely with the team here and maintaining consistency and transparency and looking forward to seeing a lot of you at upcoming events. On the margin side, what you saw in the first quarter is really the fact that our gross margins were stronger because the mix was richer (ph). We had a higher set of premium tier launches coming through and that impacted our volume, and we benefited from that mix — richer mix. And if you look at our second quarter guide, we are guiding largely in line with how our first quarter came in.
So that was obviously great to see. From an operating margin perspective, it’s — in addition to the strength in the gross margins obviously, the revenue scale and the actions we took on the OpEx also benefited. And so we were happy to — extremely happy to deliver 31% operating margin in QCT and really focused on delivering to the long-term target we’ve outlined to the investors.
Operator: Our next question is from the line of Mike Walkley with Canaccord Genuity. Please proceed with your question.
Mike Walkley: Great. Thanks for taking my question and congrats on extending some of the licensing deals. I guess, just want to jump a little bit into the IoT business, the three segments, I assume, consumer is still weaker. But can you update us kind of how the inventory bleed is trending for the three business within IoT? And then within that question too, just on the recovery of IoT, share with us the X Elite ramp and how material this might become for IoT, say, in the next one to two years?
Akash Palkhiwala: Maybe I’ll address the first part and then Cristiano can talk through the X Elite question. From an IoT entry perspective, what we have seen is stabilization really on the consumer side. As you know, we were one of the first to call out the weakness in IoT, and now we’re seeing it go through both on the industrial and the edge networking side. And consistent with our previous comments, we think the first quarter was the bottom for our IoT revenue stream. We’re guiding second quarter up mid to high-single digits. Second half of the year — fiscal year, as we see the inventory channel kind of normalizing and end markets kind of benefiting from that — we’re excited about what our product portfolio can bring and overall, lots of opportunities for us. So over — in my mind, there’s significant uncertainty, but we are cautiously optimistic, and I think we have a great product portfolio as we look forward.
Cristiano Amon: Look, your question about X Elite and in PC. It’s too early. We’re tracking to the launch of products with this chipset tied with the next version of Microsoft Windows that has a lot of the Windows AI capabilities. We’re still maintaining the same date, which is driven by Windows, which is mid-2024, getting ready for back-to-school, what we’re excited about it is since we announced that Tech Summit showing the performance of the product and the AI capabilities, design traction continue to increase. So we had increased the number of designs since last quarter. and we continue to march forward towards the launch. We like that everybody is now talking about on-device AI on PC. That’s where we started this journey with X Elite. And I think that proved to be a tailwind to the opportunity for us in PCs.
Mike Walkley: Great. Thanks. And maybe Cristiano, just a quick follow-on question. Just on the auto business, how should we think about the ramp of that business over the next one to two years? You’ve talked about a lot of design win activity and digital chassis ramping this year, but with ADAS coming into the model, how might that business ramp towards your target in 2026.
Cristiano Amon: No, absolutely. Thank you for your question. Look, let me step back a little bit and say we’re extremely pleased with our performance in auto, especially when you look at the overall market. Right now you can look at Qualcomm results with record revenues and very strong, I think, year-over-year growth. In 2023, in this year that just closed, we launched 75 models with our silicon with a significant improvement in silicon content as it relates to those immersive cockpit and in many cases, processing for safety. So we’re very happy with the business. And I think the answer to your question is, we are on track to meet our target that we said on the Auto Investor Day of $4 billion and $9 billion, respectively, I think for ‘26 at the end of the decade. So we’re on track for that. And the next quarter, we’re going to give you an update on the design win pipeline that continues to grow.
Operator: Our next question comes from Stacy Rasgon with Bernstein Research. Please proceed with your question.
