Core Points - A shareholder class action lawsuit has been filed against Skyworks Solutions, Inc. alleging that the company made materially false or misleading statements regarding its mobile business expansion and client base [1] - The lawsuit specifically targets investors who purchased shares between July 30, 2024, and February 5, 2025, and experienced significant losses [2] - The deadline for potential lead plaintiffs to file their applications is set for May 5, 2025 [3] Company Information - Skyworks Solutions, Inc. is facing legal challenges related to allegations of misleading statements that may have impacted investor decisions [1] - The law firm Holzer & Holzer, LLC, known for its focus on shareholder litigation, is representing the plaintiffs in this case [3] - Holzer & Holzer has a history of recovering substantial amounts for shareholders affected by corporate misconduct [3]

Core Insights - Skyworks Solutions, Inc. is under investigation for potential violations of federal securities laws and unlawful business practices [1] - The company reported a significant decline in quarterly revenue for the fiscal quarter ended December 27, 2024, with expectations of a mid-to-high teens sequential decline in mobile revenue [2] - Following the financial results announcement, Skyworks' stock price dropped by $21.48 per share, or 24.67%, closing at $65.60 on February 6, 2025 [2] Company Developments - Skyworks appointed Philip Brace as the new President and Chief Executive Officer, effective February 17, 2025 [2] - The investigation by Bragar Eagel & Squire, P.C. is aimed at protecting the rights of Skyworks stockholders who may have suffered losses [1][3] Legal Context - Bragar Eagel & Squire, P.C. is a law firm that specializes in representing investors in complex litigation, including securities-related cases [4]

Group 1 - The investor has experienced multiple market crashes, including those in 1987, 2000, and 2008, indicating a long-term perspective on market volatility [1] - The investor utilizes trading systems developed with TradeStation, suggesting a reliance on technology for trading strategies [1] - The investor has a background as a process control engineer and holds a JD, which may contribute to a disciplined and analytical approach to investing [1] Group 2 - The analyst has a beneficial long position in SWKS shares, indicating confidence in the company's future performance [2] - The article expresses the author's own opinions without external compensation, emphasizing independence in analysis [2] - The company engages in selling calls on its shares, which may indicate a strategy to generate income from existing holdings [2]

Core Insights - Skyworks Solutions, Inc. is under investigation for potential securities fraud and unlawful business practices involving its officers and directors [1] - The company reported a significant decline in quarterly revenue for the fiscal quarter ending December 27, 2024, with expectations of a mid-to-high teens sequential decline in mobile revenue [2] - Following the financial results announcement, Skyworks' stock price dropped by $21.48 per share, or 24.67%, closing at $65.60 on February 6, 2025 [3] Financial Performance - Skyworks reported a greater than anticipated decline in quarterly revenue for the fiscal quarter ended December 27, 2024 [2] - The company anticipates a mid-to-high teens sequential decline in mobile revenue [2] Management Changes - Philip Brace has been appointed as the new President and Chief Executive Officer of Skyworks, effective February 17, 2025 [2]

Core Insights - Skyworks Solutions (SWKS) reported non-GAAP earnings of $1.60 per share for Q1 fiscal 2025, exceeding the Zacks Consensus Estimate by 1.91% but down 18.8% year-over-year [1] - Revenues for the quarter were $1.07 billion, a decline of 11.1% year-over-year, yet surpassing the consensus estimate by 0.31% [2] - Mobile revenues accounted for nearly 67% of total revenues, showing a sequential increase of 6%, driven by successful product launches and the growing adoption of generative AI in smartphones [2] Revenue and Market Performance - The adoption of Wi-Fi 6e and 7 systems has increased demand for Skyworks' RF solutions, contributing to a multi-year upgrade cycle [3] - Broad Markets experienced modest growth, with a year-over-year increase of 2%, supported by demand signals and backlog improvements in automotive electrification, edge IoT, and AI data centers [3] - Skyworks' shares have decreased by 9.7% over the past six months, contrasting with a 19.5% rise in the Zacks Computer and Technology sector [4] Operating and Financial Metrics - Non-GAAP gross margin decreased by 20 basis points year-over-year to 46.5% [5] - Research & development expenses rose by 380 basis points year-over-year to 16.5% of revenues, while selling, general, and administrative expenses increased by 120 basis points to 7.7% [5] - Non-GAAP operating margin contracted by 380 basis points year-over-year to 26.7% [5] Balance Sheet and Cash Flow - As of December 27, 2024, cash and cash equivalents along with marketable securities totaled $1.75 billion, up from $1.57 billion as of September 27, 2024 [6] - Long-term debt remained steady at $994 million, and cash generated by operating activities was $377.2 million, down from $476 million in the previous quarter [6] - Free cash flow was reported at $338.2 million, reflecting a 31.7% free cash flow margin [6] Dividend and Guidance - The company paid dividends amounting to $112 million in the reported quarter [7] - For Q2 fiscal 2025, Skyworks expects revenues between $935 million and $965 million, with non-GAAP diluted earnings projected at $1.20 per share at the midpoint of the revenue range [8] Zacks Rank and Comparables - Skyworks currently holds a Zacks Rank 3 (Hold) [10] - Other stocks in the sector with better rankings include Akamai Technologies (Zacks Rank 2), Bel Fuse (Zacks Rank 2), and Arista Network (Zacks Rank 1) [10]

Group 1: Arm Holdings PLC - Arm Holdings missed fiscal third-quarter revenue estimates and lowered its full-year forecast, resulting in a 3.8% drop in share price to $166.76 [2] - Despite the revenue miss, nine analysts raised their price targets, with Rosenblatt Securities increasing its target from $180 to $225 [2] - The stock has a year-over-year gain of 125%, with support at the 20-day moving average expected to contain losses [2] Group 2: Qualcomm Inc - Qualcomm reported better-than-expected earnings and revenue for the fiscal first quarter, but provided a disappointing growth outlook for its patent licensing business, leading to a 5.1% decline in share price to $166.92 [4] - The stock is currently testing a support level at $167, while it has gained 20.5% over the past 12 months [4] - Overall options volume is significantly higher than average, with 32,000 calls and 25,000 puts exchanged, indicating active trading [5] Group 3: Skyworks Solutions Inc - Skyworks Solutions is experiencing a significant decline, down 26.2% to $64.26, potentially marking its worst single-day percentage loss on record [6] - Although the company beat profit estimates for the fiscal first quarter, its fiscal second-quarter forecast was disappointing, contributing to the stock's decline [6] - The stock has lost over 38% in the last 12 months, prompting downgrades from Mizuho and Stifel, and multiple price-target cuts from various brokerages [7]

Financial Data and Key Metrics Changes - Skyworks reported revenue of $1.068 billion for Q1 fiscal 2025, with earnings per share (EPS) of $1.60, and free cash flow of $338 million, meeting or exceeding the midpoint of guidance [11][20][23] - Gross profit was $497 million, resulting in a gross margin of 46.5% [21] - Operating income was $285 million, translating into an operating margin of 27% [22] - The company generated operating cash flow of $377 million, with capital expenditures of $39 million [23] - Cash and investment balance increased to approximately $1.75 billion, while maintaining a debt level of $1 billion [24] Business Line Data and Key Metrics Changes - Mobile revenue accounted for 67% of total revenue, increasing 6% sequentially due to support for multiple product launches [20] - Broad Markets revenue returned to year-over-year growth at 2%, marking four consecutive quarters of modest sequential growth [21] - Industrial and infrastructure segments remained subdued due to persistent inventory challenges [14] Market Data and Key Metrics Changes - The global adoption of generative AI on smartphones is expected to drive smartphone upgrades and increase RF solution requirements [12] - Demand signals and backlog in Broad Markets are improving, with certain segments reaching equilibrium in supply and demand [13] - The automotive segment returned to year-over-year growth, driven by design wins in connected cars and infotainment systems [17] Company Strategy and Development Direction - The company is focusing on diversification and innovation in RF solutions, particularly in automotive electrification, edge IoT, and AI data centers [14][31] - A new $2 billion stock repurchase program has been approved as part of a disciplined capital allocation strategy [28] - The company plans to continue investing in technology and product roadmaps despite challenges in revenue from its largest customer [27][31] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in the competitive landscape, particularly with their largest customer, leading to a dual-sourcing strategy [30][41] - The company anticipates a decline in mobile business revenue in Q2 fiscal 2025, in line with historical seasonality, while expecting growth in Broad Markets [24][25] - Management remains committed to innovation and expanding product offerings to capture more opportunities in the next-generation phone expected in 2026 [31][77] Other Important Information - Liam Griffin announced his resignation as CEO, with Philip Brace appointed as the new CEO effective February 17, 2025 [7][8] - The effective tax rate for the quarter was 12.2%, contributing to a net income of $258 million [23] Q&A Session Summary Question: Comments on the transition and competition with the largest customer - Management confirmed that while they retained some sockets, they are now dual-sourced instead of single-sourced, which has impacted revenue expectations [41][46] Question: Future socket opportunities and competitive dynamics - Management indicated that they are unlikely to win back lost sockets to Qualcomm but have been successful in gaining content in other areas [56][58] Question: Repurposing RF designs for new content wins - Management stated that technology developed for mobile can be leveraged across different markets, including Android and broad markets [61][63] Question: Long-term strategy for China and tariffs - The company plans to remain selective in the high-end market in China, focusing on high-performance RF solutions [98] Question: Performance gap with competitors - Management noted that the competition has intensified, but they are committed to improving their technology and performance to regain market share [104][106]

Core Insights - Skyworks Solutions (SWKS) reported quarterly earnings of $1.60 per share, exceeding the Zacks Consensus Estimate of $1.57 per share, but down from $1.97 per share a year ago, indicating an earnings surprise of 1.91% [1] - The company generated revenues of $1.07 billion for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 0.31%, but down from $1.2 billion year-over-year [2] - Skyworks has outperformed consensus EPS estimates three times in the last four quarters and has also topped revenue estimates three times during the same period [2] Earnings Outlook - The sustainability of Skyworks' stock price movement will largely depend on management's commentary during the earnings call and future earnings expectations [3][4] - The current consensus EPS estimate for the upcoming quarter is $1.19 on revenues of $942.25 million, while for the current fiscal year, the estimate is $5.34 on revenues of $3.99 billion [7] Industry Context - The Semiconductors - Radio Frequency industry, to which Skyworks belongs, is currently ranked in the top 12% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% of ranked industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Performance - Net revenue for the three months ended December 27, 2024, was $1,068.5 million, a decrease of 11.0% compared to $1,201.5 million for the same period in 2023[10] - Gross profit for the same period was $441.9 million, down from $506.6 million, reflecting a gross margin of approximately 41.4%[10] - Operating income decreased to $181.1 million, a decline of 30.0% from $258.3 million year-over-year[10] - Net income for the quarter was $162.0 million, down 29.9% from $231.3 million in the prior year[10] - Basic earnings per share were $1.01, compared to $1.45 in the same quarter last year, representing a decrease of 30.3%[10] - Net revenue decreased to $1,068.5 million for the three months ended December 27, 2024, a decline of 11.1% compared to $1,201.5 million for the same period in fiscal 2024, primarily due to decreased demand for mobile products[69] - Gross profit for the same period was $441.9 million, representing a decrease of 12.8% from $506.6 million, with gross profit margin at 41.4% compared to 42.2%[71] - Net income for the three months ended December 27, 2024, was $162.4 million, or 15.2% of net revenue, down from 19.3% in the prior year[69] Cash and Assets - Cash and cash equivalents increased to $1,602.5 million from $1,368.6 million, reflecting a net increase of $233.9 million during the quarter[17] - Total assets as of December 27, 2024, were $8,331.1 million, up from $8,283.3 million at the end of the previous quarter[16] - Cash and cash equivalents amounted to $1,602.5 million as of December 27, 2024, an increase from $1,368.6 million as of September 27, 2024[34] - Cash, cash equivalents, and marketable securities totaled $1,754.8 million as of December 27, 2024, an increase of $180.7 million from the previous quarter[89] - The company's marketable securities totaled $136.7 million as of December 27, 2024, down from $194.1 million as of September 27, 2024[33] Expenses - Research and development expenses rose to $176.4 million, an increase of 15.2% compared to $153.1 million in the prior year[10] - Selling, general, and administrative expenses rose to $82.6 million, a 4.8% increase from $78.8 million, representing 7.7% of net revenue compared to 6.6%[75] - Total share-based compensation for the three months ended December 27, 2024, was $51.1 million, a decrease of 4.1% from $53.3 million in the same period in 2023[59] Taxation - For the three months ended December 27, 2024, the provision for income taxes was $28.4 million, compared to $20.4 million for the same period in 2023, reflecting an increase of 39.2%[8] - The effective tax rate for the three months ended December 27, 2024, was 14.9%, significantly lower than the 21.0% U.S. federal statutory rate, primarily due to foreign earnings taxed at lower rates[8] - Provision for income taxes was $28.4 million, representing 2.7% of net revenue, an increase from 1.7% in the prior year[81] Shareholder Returns - Dividends paid during the quarter amounted to $112.5 million, slightly up from $108.9 million in the same period last year[17] - A cash dividend of $0.70 per share was declared on February 5, 2025, payable on March 17, 2025, to stockholders of record as of February 24, 2025[57] - The company has a stock repurchase program authorized for up to $2.0 billion, with $1.9 billion remaining available as of December 27, 2024[54][55] - During the three months ended December 27, 2024, the company repurchased 428,369 shares at an average price of $89.42[117] Debt and Liabilities - The carrying amount of total debt under Senior Notes was $994.7 million as of December 27, 2024, compared to $907.9 million as of September 27, 2024[37] - The company expects annual amortization expense for definite-lived intangible assets to be $129.8 million in 2025[43] Operational Insights - The company's inventory totaled $699.7 million as of December 27, 2024, a decrease from $784.8 million as of September 27, 2024[38] - The company recorded an impairment charge of $16.1 million related to a previously capitalized in-process research and development project during the three months ended December 29, 2023[35] - The company expects revenues to be negatively impacted by a decrease in market share at a significant customer starting in the fourth quarter of fiscal 2025[70] Compliance and Governance - The company has filed its Fiscal Year 2025 Executive Incentive Plan, indicating a focus on performance-based compensation for executives[120] - Certifications from the Chief Executive Officer and Chief Financial Officer have been submitted, ensuring compliance with the Sarbanes-Oxley Act[121] - The company's disclosure controls and procedures were evaluated as effective at the reasonable assurance level as of December 27, 2024[103] - There were no changes to the internal control over financial reporting that materially affected or are likely to materially affect the company during the first quarter of fiscal 2025[104] Market and Risk Factors - The company derives significant revenues from international customers, primarily in the Asia-Pacific region and Europe, exposing it to various geopolitical and economic risks[110] - The company is subject to risks associated with doing business in China, including evolving laws and regulations that could adversely affect demand from Chinese customers[115] - The company recognizes that foreign exchange volatility could have a greater effect on business in the future as expenses become increasingly denominated in foreign currencies[100] - A hypothetical reduction in interest rates by 100 basis points would result in an immaterial reduction of interest income, with a de minimis impact on income before taxes[98] - The company has not entered into any outstanding foreign currency forward or options contracts for the three months ended December 27, 2024[101] - The company is evaluating the impact of recently issued accounting standards on its consolidated financial statements[27][28][29]

Financial Performance - Revenue for Q1 Fiscal 2025 was $1.068 billion, representing a 4% sequential growth[3] - GAAP diluted earnings per share (EPS) was $1.00, while non-GAAP diluted EPS was $1.60[5] - Non-GAAP gross profit for Q1 was $497.1 million, with a non-GAAP gross margin of 46.5%[23] - GAAP net income for Q1 was $162 million, down from $231.3 million in the same quarter last year[22] - Non-GAAP net income for the three months ended December 27, 2024, was $162.0 million, down from $231.3 million for the same period in 2023, representing a decrease of approximately 29.9%[37] Cash Flow and Liquidity - Operating cash flow was $377 million, with a 35% operating cash flow margin, and free cash flow was $338 million, with a 32% free cash flow margin[5] - Cash and cash equivalents at the end of the period were $1,602.5 million, up from $1,029.7 million at the end of the same period in 2023, indicating an increase of approximately 55.5%[37] - The company reported a net cash provided by operating activities of $377.2 million for the three months ended December 27, 2024, compared to $774.9 million for the same period in 2023, a decline of approximately 51.3%[37] - Non-GAAP free cash flow for the three months ended December 27, 2024, was not explicitly stated but is derived from net cash provided by operating activities of $377.2 million after deducting capital expenditures[37] Future Projections - For Q2 Fiscal 2025, revenue is expected to be between $935 million and $965 million, with non-GAAP diluted EPS projected at $1.20 at the midpoint[8] - Non-GAAP diluted earnings per share for Q2 2025 is estimated to be impacted by share-based compensation expense of $0.20 to $0.40 per diluted share, amortization of intangibles of $0.20 to $0.30 per diluted share, and certain tax items of -$0.15 to $0.20 per diluted share[32] Shareholder Returns - A new $2 billion stock repurchase program has been approved, succeeding the previous program from January 2023[10] - A cash dividend of $0.70 per share has been declared, payable on March 17, 2025[12] Assets and Liabilities - The company had cash and marketable securities of approximately $1.75 billion as of December 27, 2024[11] - Total assets increased to $8,331.1 million as of December 27, 2024, compared to $8,283.3 million as of September 27, 2024, reflecting a growth of approximately 0.6%[35] - Total liabilities increased to $1,930.4 million as of December 27, 2024, compared to $1,942.6 million as of September 27, 2024, a decrease of approximately 0.6%[35] - The company’s stockholders' equity rose to $6,400.7 million as of December 27, 2024, from $6,336.7 million as of September 27, 2024, reflecting an increase of approximately 1.0%[35] Inventory and Expenses - Inventory decreased to $699.7 million as of December 27, 2024, from $784.8 million as of December 29, 2023, representing a reduction of approximately 10.8%[35] - Share-based compensation expense for the three months ended December 27, 2024, was $51.1 million, slightly down from $53.3 million for the same period in 2023, a decrease of approximately 4.1%[33] Business Developments - The company secured 5G content for premium Android smartphones for major brands including Samsung Galaxy, Xiaomi, and Asus[9]