Qorvo(QRVO) - 2026 Q1 - Quarterly Results

Financial Highlights and Outlook Q1 FY2026 Performance Summary Qorvo's Q1 FY2026 revenue and non-GAAP EPS exceeded guidance, reaching $818.8 million and $0.92 respectively | Metric | GAAP | Non-GAAP | | :--- | :--- | :--- | | Revenue | $818.8M | $818.8M | | Gross Margin | 40.5% | 44.0% | | Operating Income | $30.1M | $108.2M | | Diluted EPS | $0.27 | $0.92 | - First quarter revenue and non-GAAP EPS surpassed the high-end of guidance, driven by broad-based demand[2] Management Commentary Management highlighted strong Q1 results and expects continued growth and margin expansion from strategic initiatives - The company is implementing a broad set of initiatives to structurally improve profitability[2] - The CFO noted that the Q1 non-GAAP gross margin of 44% represented a meaningful year-over-year improvement and that actions across the business are expected to improve profitability through fiscal 2026 and 2027[2] Q2 FY2026 Outlook The company projects Q2 FY2026 revenue of approximately $1.025 billion and non-GAAP diluted EPS of around $2.00 | Metric | Q2 FY2026 Outlook | | :--- | :--- | | Quarterly Revenue | $1.025B ± $50M | | Non-GAAP Gross Margin | 48% - 50% | | Non-GAAP Diluted EPS | $2.00 ± $0.25 | Selected Financial Results Selected GAAP Results Q1 FY2026 GAAP results show a revenue decrease but significant improvements in gross margin and operating income YoY | GAAP Metric | Q1 FY2026 | Q1 FY2025 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | $818.8M | $886.7M | -7.7% | | Gross Margin | 40.5% | 37.5% | +3.0 ppt | | Operating Income | $30.1M | $4.6M | +554.3% | | Diluted EPS | $0.27 | $0.00 | +$0.27 | Selected Non-GAAP Results Non-GAAP results for Q1 FY2026 indicate year-over-year growth in operating income, diluted EPS, and gross margin | Non-GAAP Metric | Q1 FY2026 | Q1 FY2025 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | $818.8M | $886.7M | -7.7% | | Gross Margin | 44.0% | 40.9% | +3.1 ppt | | Operating Income | $108.2M | $98.1M | +10.3% | | Diluted EPS | $0.92 | $0.87 | +5.7% | Segment Performance (GAAP) The HPA segment demonstrated strong revenue and operating income growth, while the ACG segment saw a decline | Segment (Q1 FY2026) | Revenue | YoY Revenue Change | Operating Income | YoY Op. Income Change | | :--- | :--- | :--- | :--- | :--- | | HPA | $137.4M | +6.1% | $21.6M | +340.8% | | CSG | $110.2M | -4.1% | ($7.5M) | +61.5% (loss reduced) | | ACG | $571.2M | -11.1% | $97.9M | -15.9% | Non-GAAP Financial Measures Rationale and Use Management uses non-GAAP measures for internal planning and to provide investors a clearer view of business trends - Management develops its annual operating plan and makes decisions about R&D, product spending, and administrative budgets using non-GAAP financial measures[13] - The company provides non-GAAP measures to enable investors to perform additional comparisons of operating results and analyze financial performance excluding effects that may obscure trends, such as stock-based compensation[13][14] Definition of Key Non-GAAP Metrics The company defines key non-GAAP metrics including Free Cash Flow, EBITDA, and Net Debt to assess performance - Free Cash Flow: Defined as net cash provided by operating activities minus property and equipment expenditures, it is used as an indicator of liquidity and financial strength[21] - EBITDA: Calculated by adjusting GAAP net income for interest, taxes, depreciation, amortization, stock-based compensation, and other charges not representative of ongoing operations[22] - Net Debt or Positive Net Cash: Defined as unrestricted cash, cash equivalents, and short-term investments minus the principal balance of borrowings, providing information on the company's indebtedness level[24] Limitations and Forward-Looking Guidance The company acknowledges limitations of non-GAAP measures and its inability to reconcile forward-looking guidance to GAAP - The company cannot reconcile forward-looking non-GAAP guidance to GAAP due to the variability and difficulty in projecting items such as stock-based compensation, acquisition costs, and restructuring charges[26] - Key limitations of non-GAAP measures include a lack of comparability with other companies and the exclusion of information some may consider important, which Qorvo compensates for by providing full disclosure and reconciliations for historical data[27] Detailed Financial Statements and Reconciliations Condensed Consolidated Statements of Income Q1 FY2026 income statement shows decreased revenue but substantially higher operating and net income year-over-year | (In thousands) | Three Months Ended June 28, 2025 | Three Months Ended June 29, 2024 | | :--- | :--- | :--- | | Revenue | $818,778 | $886,671 | | Gross Profit | $331,802 | $332,304 | | Operating Income | $30,086 | $4,606 | | Net Income | $25,594 | $414 | | Diluted EPS | $0.27 | $0.00 | Reconciliation of GAAP to Non-GAAP Measures Q1 FY2026 GAAP net income was reconciled to non-GAAP net income primarily by adjusting for stock-based compensation | Reconciliation (Q1 FY2026, in thousands) | Amount | | :--- | :--- | | GAAP net income | $25,594 | | Stock-based compensation expense | $42,475 | | Amortization of acquired intangible assets | $21,521 | | Restructuring-related charges | $7,879 | | Other adjustments (net) | ($6,005) | | Non-GAAP net income | $86,474 | - Non-GAAP gross margin of 44.0% was derived from GAAP gross margin of 40.5% by excluding items such as stock-based compensation ($5.6M) and amortization of acquired intangibles ($19.2M)[38] Condensed Consolidated Balance Sheets The balance sheet as of June 2025 reflects a slight increase in total assets and stable long-term debt levels | (In thousands) | June 28, 2025 | March 29, 2025 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $1,165,478 | $1,021,176 | | Inventories | $637,961 | $640,992 | | Total current assets | $2,246,256 | $2,167,275 | | Total assets | $5,997,524 | $5,933,131 | | Liabilities & Equity | | | | Total current liabilities | $798,330 | $783,182 | | Long-term debt | $1,549,200 | $1,549,215 | | Total liabilities | $2,560,455 | $2,540,819 | | Total stockholders' equity | $3,437,069 | $3,392,312 | Condensed Consolidated Statements of Cash Flows The company generated significantly higher cash from operations in Q1 FY2026 compared to the prior-year quarter | (In thousands) | Three Months Ended June 28, 2025 | | :--- | :--- | | Net cash provided by operating activities | $182,945 | | Net cash used in investing activities | ($33,331) | | Net cash used in financing activities | ($6,935) | | Net increase in cash | $144,302 | - Free cash flow for Q1 FY2026 was $145.4 million, calculated from $182.9 million in net cash from operating activities minus $37.5 million in purchases of property and equipment[38] Corporate Information and Disclosures About Qorvo and Conference Call Qorvo provides semiconductor solutions for high-growth markets and held a conference call to discuss quarterly results - Qorvo supplies semiconductor solutions to diverse markets including automotive, consumer, defense & aerospace, industrial & enterprise, infrastructure, and mobile[29] - A conference call to discuss the press release was scheduled for 4:30 p.m. ET on the day of the release[28] Forward-Looking Statements Disclaimer The report contains forward-looking statements subject to significant risks and uncertainties detailed in SEC filings - The press release includes forward-looking statements that are not historical facts and are subject to risks that could cause actual results to differ materially[31] - Key business risks include fluctuations in operating results, dependence on a few large customers, manufacturing facility risks, and changes in government trade policies[31]