U.S. stock futures were higher this morning, with the Nasdaq 100 futures gaining more than 200 points on Wednesday.Shares of Qorvo, Inc. (NASDAQ:QRVO) fell sharply in pre-market trading after the company reported third-quarter financial results and issued fourth-quarter sales guidance below estimates.Qorvo shares expects fiscal fourth-quarter revenue to be in the range of $775 million to $825 million versus estimates of $904.59 million. The company anticipates adjusted earnings of $1.05 to $1.35 per share i ...

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Qorvo (QRVO) reported $992.96 million in revenue for the quarter ended December 2025, representing a year-over-year increase of 8.4%. EPS of $2.17 for the same period compares to $1.61 a year ago.The reported revenue represents a surprise of +0.17% over the Zacks Consensus Estimate of $991.28 million. With the consensus EPS estimate being $1.87, the EPS surprise was +16.27%.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street ...

Core Viewpoint - Qorvo reported quarterly earnings of $2.17 per share, exceeding the Zacks Consensus Estimate of $1.87 per share, and showing an increase from $1.61 per share a year ago, indicating a strong earnings surprise of +16.27% [1] Financial Performance - The company achieved revenues of $992.96 million for the quarter ended December 2025, surpassing the Zacks Consensus Estimate by 0.17% and up from $916.32 million year-over-year [2] - Over the last four quarters, Qorvo has consistently exceeded consensus EPS estimates and revenue estimates [2] Stock Performance and Outlook - Qorvo shares have declined approximately 2.4% since the beginning of the year, contrasting with the S&P 500's gain of 1.5% [3] - The company's earnings outlook is crucial for assessing future stock performance, with current consensus EPS estimates at $1.37 for the upcoming quarter and $6.36 for the current fiscal year [7] Industry Context - The Semiconductors - Radio Frequency industry, to which Qorvo belongs, is currently ranked in the top 20% of over 250 Zacks industries, suggesting a favorable industry outlook [8] - Empirical research indicates a strong correlation between near-term stock movements and earnings estimate revisions, which can impact Qorvo's stock performance [5]

CEO Bob Bruggeworth said Qorvo continues to execute restructuring actions intended to “optimize profitability and reduce capital intensity.” He highlighted progress in the company’s factory network, including the closure of its Costa Rica facility in December, which he said occurred “a few months ahead of schedule,” with production transitioned to external partners.Inventory ended the period at $530 million, which Brown said was down $75 million sequentially and down $111 million versus the end of the prior ...

Financial Data and Key Metrics Changes - Qorvo reported fiscal third quarter revenue of $993 million, with a non-GAAP gross margin of 49.1% and non-GAAP diluted earnings of $2.17 per share, all of which compared favorably to guidance [16] - The company generated operating cash flow of approximately $265 million and incurred $28 million in capital expenditures, resulting in free cash flow of $237 million [17] - For the upcoming March quarter, revenue is expected to be $800 million ± $25 million, with a non-GAAP gross margin between 48% and 49% [17] Business Line Data and Key Metrics Changes - In the ACG segment, December quarterly revenue declined sequentially, consistent with typical seasonality, but saw double-digit revenue growth compared to last December due to content gains from the largest customer [7] - CSG is on track with an automotive ultra-wideband program, receiving first production orders during the December quarter, indicating strong customer demand [10] - HPA continues to see multiyear tailwinds in defense and aerospace markets, with expected sales in D&A markets totaling approximately $500 million for fiscal year 2027 [13] Market Data and Key Metrics Changes - Android revenue is expected to decline by approximately $300 million in fiscal 2027, primarily due to strategic actions to reduce exposure to lower-margin segments and the impact of memory pricing on mass-tier Android build plans [9][27] - The company anticipates a mid-single-digit decline in full-year revenue for fiscal 2027, with ACG declining but becoming more profitable, CSG remaining approximately flat, and HPA continuing its double-digit growth [15] Company Strategy and Development Direction - Qorvo is pursuing a long-term growth strategy while optimizing profitability and reducing capital intensity through restructuring actions [5] - The company is intentionally resizing its Android business to reduce exposure to lower-margin segments while focusing on high-volume premium and flagship tiers [10] - Qorvo is divesting or exiting underperforming businesses to improve overall profitability and is strategically managing its product portfolio and pricing [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to compete effectively and grow its footprint despite increased competition in certain product areas [24] - The company expects improvements in gross margins due to a healthier revenue mix and ongoing operating expense reduction efforts [10][15] - Management highlighted that the defense and aerospace business is expected to surpass the Android business in size, reflecting a significant shift in the company's portfolio [15] Other Important Information - The company closed its Costa Rica facility ahead of schedule and transitioned to external partners, which is expected to enhance operational efficiency [6] - Qorvo's non-GAAP tax rate for fiscal 2026 is expected to be approximately 15%, with ongoing monitoring of potential changes in tax policy [18] Q&A Session Summary Question: Content roadmap and competition in sockets - Management acknowledged increased competition due to dual sourcing but emphasized ongoing opportunities for growth in various sockets [22][24] Question: Android revenue decline and seasonal expectations - Management clarified that the expected decline in Android revenue is due to strategic exits from lower-margin business and not typical seasonal patterns [25][27] Question: Impact of memory pricing on Android business - Management indicated that higher memory prices are affecting customer build plans, accelerating the strategic exit from lower-tier Android businesses [54] Question: Gross margin outlook for fiscal 2027 - Management stated that margin improvements will primarily come from a favorable business mix, particularly as HPA becomes a larger percentage of total revenue [33] Question: Changes in inventory levels at customers - Management reported no abnormal inventory levels, attributing adjustments to customer build plans in response to memory pricing [58]

Financial Data and Key Metrics Changes - Qorvo reported fiscal third quarter revenue of $993 million, with a non-GAAP gross margin of 49.1% and non-GAAP diluted earnings of $2.17 per share, all exceeding guidance [16] - The company generated operating cash flow of approximately $265 million and free cash flow of $237 million during the quarter [17] - For fiscal Q4, revenue guidance is set at $800 million ± $25 million, with a non-GAAP gross margin between 48% and 49% [17] Business Line Data and Key Metrics Changes - In the ACG segment, December quarterly revenue declined sequentially, but there was double-digit revenue growth compared to last December due to content gains from the largest customer [7] - CSG is expanding in automotive and enterprise sectors, with first production orders received for an automotive ultra-wideband program [10] - HPA continues to see growth across defense and aerospace markets, with expected sales in D&A markets totaling approximately $500 million for fiscal 2027 [12][13] Market Data and Key Metrics Changes - Android revenue is expected to decline by approximately $300 million in fiscal 2027, primarily due to strategic exit from lower-margin segments and memory pricing impacts [9][27] - The company anticipates a mid-single-digit decline in full-year revenue for fiscal 2027, with ACG declining but becoming more profitable, CSG remaining flat, and HPA continuing double-digit growth [15] Company Strategy and Development Direction - Qorvo is focusing on optimizing profitability and reducing capital intensity through restructuring actions, including the closure of the Costa Rica facility and transitioning production to external partners [6] - The company is intentionally resizing its Android business to reduce exposure to low-margin segments while maintaining a strong presence in premium and flagship smartphone markets [10] - Qorvo aims to achieve gross margins above 50% and EPS approaching $7 per share in fiscal 2027, reflecting a structurally improved portfolio mix and ongoing operational excellence [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth strategy, highlighting the importance of innovation and operational excellence in navigating the current market challenges [5] - The company is closely monitoring changes in tax policy that may affect operations and financial results [19] - Management noted that while there are pressures from memory pricing and availability, the strategic exit from lower-margin Android segments is expected to support overall profitability [54] Other Important Information - The company ended the quarter with approximately $1.3 billion in cash and equivalents and $1.5 billion in long-term debt, with no near-term maturities [16] - Qorvo's non-GAAP tax rate for fiscal 2026 is expected to be approximately 15% [18] Q&A Session Summary Question: Content roadmap and competition in sockets - Management acknowledged increased competition due to dual sourcing but remains optimistic about growth opportunities in future generations [22][24] Question: Android revenue decline and seasonal expectations - Management clarified that the expected decline in Android revenue is due to strategic exits and not typical seasonal patterns [25][27] Question: Impact of memory pricing on Android business - Management indicated that higher memory prices are affecting build plans, accelerating the exit from lower-margin Android segments [54] Question: Gross margin outlook for fiscal 2027 - Management stated that margin improvements will primarily come from a favorable business mix, particularly as HPA grows in significance [33] Question: Changes in inventory levels at customers - Management reported no abnormal inventory levels, attributing adjustments to customer build plans in response to memory pricing [58]

Financial Data and Key Metrics Changes - Qorvo reported fiscal third quarter revenue of $993 million, with a non-GAAP gross margin of 49.1% and non-GAAP diluted earnings of $2.17 per share, all of which compared favorably to guidance [15] - The company ended the quarter with approximately $1.3 billion in cash and equivalents and $1.5 billion in long-term debt, with a net inventory balance of $530 million, reflecting a sequential reduction of $75 million [15][16] - Non-GAAP gross margin increased approximately 260 basis points year-over-year, with expectations for similar improvement in the next quarter [16] Business Line Data and Key Metrics Changes - In the ACG segment, December quarterly revenue declined sequentially, consistent with typical seasonality, but saw double-digit revenue growth compared to last December due to content gains from a major customer [6][8] - CSG is expanding its automotive ultra-wideband program, receiving first production orders during the December quarter, while also divesting its MEMS-based sensing solutions business [10][11] - HPA continues to see multiyear tailwinds in defense and aerospace markets, with expected sales of approximately $500 million in fiscal year 2027 [11] Market Data and Key Metrics Changes - Android revenue is expected to decline by approximately $300 million in fiscal 2027, primarily due to strategic actions to reduce exposure to lower-margin segments and the impact of memory pricing on mass-tier Android build plans [8][14] - The company anticipates a mid-single-digit decline in full-year revenue for fiscal 2027, with ACG declining but becoming more profitable, CSG remaining flat, and HPA continuing double-digit growth [14] Company Strategy and Development Direction - Qorvo is pursuing a long-term growth strategy while optimizing profitability and reducing capital intensity through restructuring actions [5] - The company is intentionally resizing its Android business to focus on high-margin premium and flagship tiers, expecting improved product mix to support higher gross margins [9][14] - Qorvo is divesting or exiting underperforming businesses while focusing on high-performing segments, particularly in defense and aerospace [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to compete effectively despite increased competition in certain sockets, emphasizing ongoing investment in R&D [22] - The company expects to deliver full-year FY 2027 gross margins above 50% and EPS approaching $7 per share, reflecting a structurally improved portfolio mix and commitment to operational excellence [14] - Management noted that the ongoing strategic exit from lower-margin Android business is being accelerated by memory pricing and availability constraints impacting customer build plans [27][55] Other Important Information - The transfer of SAW filter production from Greensboro, North Carolina, to Richardson, Texas, is on track, which is expected to enhance operational efficiency [6] - The company generated operating cash flow of approximately $265 million during the quarter, resulting in free cash flow of $237 million [16] Q&A Session Summary Question: Content roadmap and competition in sockets - Management acknowledged opportunities for growth despite increased competition and emphasized ongoing investment in R&D to expand their footprint [22] Question: Android revenue decline and seasonal expectations - Management clarified that the expected decline in Android revenue is due to strategic exits from lower-margin business and not typical seasonal patterns [23] Question: Impact of business divestments on revenue - Management indicated that the majority of revenue decline is related to Android, with minimal impact from divestitures [41] Question: Integrated modules and future prospects - Management noted that while there is a loss of share in ultra-high-band, they are still positioned to benefit from high-band PAD wins [45][64] Question: Memory pricing effects on mobile business - Management confirmed that higher memory prices are impacting mass-tier Android business, accelerating their strategic exit from that segment [55]

Financial Performance - Qorvo's fiscal 2026 third quarter revenue was $993.0 million, with a gross margin of 46.7% and diluted earnings per share of $1.75 on a GAAP basis[2] - Non-GAAP gross margin for the same quarter was 49.1%, with operating income of $247.6 million and diluted earnings per share of $2.17[2] - Revenue decreased by approximately 6.2% sequentially from Q2 fiscal 2026, but increased by 8.4% year-over-year compared to Q3 fiscal 2025[8] - Qorvo's net income for Q3 fiscal 2026 was $164.1 million, reflecting a 122.8% increase year-over-year[8] - Operating income for the total company increased by 21.8% sequentially and 262.5% year-over-year[12] - Non-GAAP net income for the three months ended December 27, 2025, was $203,238,000, up from $152,753,000 year-over-year[39] - Net income for the three months ended December 27, 2025, was $164.062 million, a significant increase from $41.271 million for the same period in 2024, representing a growth of 297%[47] Revenue Growth - The automotive components, consumer and enterprise Wi-Fi, and power management segments showed notable year-over-year revenue growth[3] - The HPA segment revenue grew by 11.2% year-over-year, while the ACG segment revenue increased by 8.8% year-over-year[12] - Qorvo reported revenue of $992.96 million for the three months ended December 27, 2025, an increase of 8.4% compared to $916.32 million for the same period in 2024[37] Cost Management - The company continues to focus on cost and productivity initiatives to enhance gross and operating margins[4] - Qorvo's total operating expenses for the three months ended December 27, 2025, were $272.05 million, down from $338.39 million in the same period last year, indicating cost management efforts[37] - Non-GAAP operating income margin was 24.9% for the three months ended December 27, 2025, compared to 19.4% for GAAP operating income margin[41] Future Outlook - Qorvo's March 2026 quarter outlook projects revenue of approximately $800 million, with a non-GAAP gross margin between 48% and 49%[5] - The company anticipates continued growth in free cash flow and gross margin, reflecting positive future outlooks despite potential market uncertainties[28] Cash Flow and Liquidity - Free cash flow for the three months ended December 27, 2025, was $236.9 million, calculated as net cash provided by operating activities minus property and equipment expenditures[41] - Net cash provided by operating activities for the nine months ended December 27, 2025, was $532.367 million, compared to $423.019 million for the same period in 2024, reflecting a year-over-year increase of 25.9%[47] - Cash and cash equivalents at the end of the period were $1.318 billion, up from $769.432 million at the end of the same period last year, indicating a 71.4% increase[47] Asset and Liability Management - Total current assets increased to $2,483,098,000 as of December 27, 2025, from $2,167,275,000 as of March 29, 2025[45] - Total liabilities decreased to $2,465,671,000 as of December 27, 2025, from $2,540,819,000 as of March 29, 2025[45] - The company recorded goodwill and intangible asset impairment of $113.066 million in the nine months ended December 27, 2024, with no impairment reported for the same period in 2025[47] Expenses - Research and development expenses for the three months ended December 27, 2025, were $178,066,000, compared to $179,126,000 in the same period last year[43] - The company reported depreciation expenses of $37.228 million for the three months ended December 27, 2025, down from $41.345 million in the same period of 2024, a decrease of 10.2%[47] - Stock-based compensation expense for the nine months ended December 27, 2025, was $109.749 million, slightly up from $108.931 million in the same period of 2024, an increase of 0.8%[47] Inventory and Receivables - The company’s inventories increased by $73.196 million for the three months ended December 27, 2025, compared to a minimal increase of $1.269 million in the same period of 2024, indicating a significant rise in inventory levels[47] - Accounts receivable increased by $54.964 million for the three months ended December 27, 2025, compared to an increase of $151.764 million in the same period of 2024, indicating a decrease in growth rate[47]