Skyworks(SWKS)2025-02-05 21:33Financial 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]