Qorvo(QRVO) - 2026 Q1 - Quarterly Report

PART I Item 1. Financial Statements (Unaudited) For the quarter ended June 28, 2025, Qorvo reported revenue of $818.8 million, a 7.7% decrease year-over-year, with operating income significantly increasing to $30.1 million and net income rising to $25.6 million Condensed Consolidated Balance Sheets As of June 28, 2025, total assets were $6.0 billion, primarily driven by a rise in cash and cash equivalents to $1.17 billion, while total liabilities remained stable Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 28, 2025 | March 29, 2025 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $1,165,478 | $1,021,176 | | 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 Income For the three months ended June 28, 2025, revenue decreased by 7.7% to $818.8 million, but operating income substantially increased to $30.1 million due to lower operating expenses, resulting in net income of $25.6 million Consolidated Statement of Income Highlights (in thousands, except per share data) | Metric | 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 Net Income per Share | $0.27 | $0.00 | Condensed Consolidated Statements of Comprehensive Income (Loss) Total comprehensive income for the quarter was $37.0 million, a significant turnaround from a comprehensive loss in the prior-year period, driven by net income and positive foreign currency translation Comprehensive Income (Loss) (in thousands) | Item | Three Months Ended June 28, 2025 | Three Months Ended June 29, 2024 | | :--- | :--- | :--- | | Net income | $25,594 | $414 | | Other comprehensive income (loss) | $11,368 | $(932) | | Total comprehensive income (loss) | $36,962 | $(518) | Condensed Consolidated Statements of Stockholders' Equity Stockholders' equity increased to $3.44 billion during the quarter, primarily due to net income and other comprehensive income, partially offset by common stock repurchases - Key activities affecting stockholders' equity in Q1 FY2026 included net income of $25.6 million, stock-based compensation of $43.8 million, and common stock repurchases totaling $50.0 million[16] Condensed Consolidated Statements of Cash Flows The company generated $182.9 million in net cash from operating activities, with net cash used in investing activities of $33.3 million and financing activities of $6.9 million, resulting in a net increase in cash of $144.3 million Cash Flow Summary (in thousands) | Cash Flow Activity | Three Months Ended June 28, 2025 | Three Months Ended June 29, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $182,945 | $81,085 | | Net cash used in investing activities | $(33,331) | $(17,185) | | Net cash used in financing activities | $(6,935) | $(29,525) | | Net increase in cash and cash equivalents | $144,302 | $33,157 | Notes to Condensed Consolidated Financial Statements Key notes detail revenue breakdown by region and segment, ongoing restructuring initiatives, and share repurchase activities Revenue by Geographic Region (in thousands) | Region | Three Months Ended June 28, 2025 | Three Months Ended June 29, 2024 | | :--- | :--- | :--- | | United States | $425,260 | $447,456 | | China | $155,895 | $196,434 | | Other Asia | $122,241 | $132,036 | | Taiwan | $96,926 | $92,554 | | Europe | $18,456 | $18,191 | | Total revenue | $818,778 | $886,671 | - The company's 2025 Restructuring Initiatives resulted in charges of $5.8 million during the quarter, primarily for contract termination and employee termination benefits, with cumulative expenses reaching approximately $264.6 million[47] Segment Revenue (in thousands) | Segment | Three Months Ended June 28, 2025 | Three Months Ended June 29, 2024 | | :--- | :--- | :--- | | HPA | $137,395 | $129,468 | | CSG | $110,153 | $114,853 | | ACG | $571,230 | $642,350 | | Total revenue | $818,778 | $886,671 | - During the quarter, the company repurchased approximately 0.7 million shares of its common stock for about $50.0 million, with $898.8 million remaining authorized for future repurchases[42] Management's Discussion and Analysis of Financial Condition and Results of Operations Management attributes the 7.7% year-over-year revenue decline to a strategic reduction in exposure to mass-market Android smartphones, while gross margin improved and operating income grew substantially First Quarter Fiscal 2026 Overview The first quarter of fiscal 2026 saw a 7.7% revenue decrease due to a strategic shift, but gross margin improved to 40.5%, and operating income increased to $30.1 million - Revenue decreased 7.7% YoY, primarily due to a strategic reduction in exposure to mass-market Android smartphones[68] - Gross margin increased to 40.5% from 37.5% in the prior-year quarter, driven by improved product costs and lower inventory-related charges[68] - Net cash provided by operating activities was $182.9 million, and the company repurchased 0.7 million shares for approximately $50.0 million[68] Results of Operations Consolidated revenue decreased by $67.9 million, primarily from the Advanced Cellular Group (ACG), while gross margin increased to 40.5% and operating expenses decreased across the board HPA Segment Performance (in thousands) | Metric | June 28, 2025 | June 29, 2024 | % Change | | :--- | :--- | :--- | :--- | | Revenue | $137,395 | $129,468 | 6.1% | | Operating income | $21,582 | $4,881 | 342.2% | CSG Segment Performance (in thousands) | Metric | June 28, 2025 | June 29, 2024 | % Change | | :--- | :--- | :--- | :--- | | Revenue | $110,153 | $114,853 | (4.1)% | | Operating loss | $(7,533) | $(19,501) | 61.4% | ACG Segment Performance (in thousands) | Metric | June 28, 2025 | June 29, 2024 | % Change | | :--- | :--- | :--- | :--- | | Revenue | $571,230 | $642,350 | (11.1)% | | Operating income | $97,934 | $116,449 | (15.9)% | Liquidity and Capital Resources As of June 28, 2025, Qorvo had working capital of $1.45 billion, including $1.17 billion in cash and cash equivalents, and generated $182.9 million in cash from operations - The company's working capital was approximately $1.45 billion, with cash and cash equivalents at $1.17 billion as of June 28, 2025[86] - Net cash provided by operating activities was $182.9 million for the quarter, driven by net income adjusted for non-cash items and favorable changes in working capital[90][91] - The company repurchased 0.7 million shares for approximately $50.0 million, with $898.8 million remaining under the authorized share repurchase program[89] - The company entered into a new five-year unsecured senior credit facility on April 23, 2024, providing a $325.0 million revolving line of credit, with no borrowings under this facility during the quarter[95][96] Item 3. Quantitative and Qualitative Disclosures About Market Risk The company states that there have been no material changes to its market risk exposures during the first quarter of fiscal 2026 - There were no material changes to the company's market risk exposures during the first quarter of fiscal 2026[110] Item 4. Controls and Procedures Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 28, 2025, with no material changes to internal control over financial reporting - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the period[111] - No changes occurred during the quarter that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[112] PART II — OTHER INFORMATION Item 1A. Risk Factors This section directs investors to the risk factors discussed in the company's Annual Report on Form 10-K for the fiscal year ended March 29, 2025 - The company refers to its Annual Report on Form 10-K for the fiscal year ended March 29, 2025, for a detailed discussion of risk factors[114] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds During the first quarter of fiscal 2026, the company repurchased 702,000 shares of common stock for approximately $50.0 million, with $898.8 million remaining available for repurchase Issuer Purchases of Equity Securities (Q1 FY2026) | Period | Total shares purchased (in thousands) | Average price paid per share | Approximate dollar value of shares that may yet be purchased (in millions) | | :--- | :--- | :--- | :--- | | March 30 - April 26, 2025 | 233 | $60.28 | $934.6 | | April 27 - May 24, 2025 | 211 | $72.90 | $919.3 | | May 25 - June 28, 2025 | 258 | $79.53 | $898.8 | | Total | 702 | $71.14 | $898.8 | Item 5. Other Information The company reported that no director or Section 16 officer adopted or terminated a Rule 10b5-1 trading arrangement during the first quarter of fiscal 2026 - No director or Section 16 officer adopted or terminated a Rule 10b5-1 trading arrangement during the first quarter of fiscal 2026[116] Item 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including bylaws, subsidiary guarantors, CEO and CFO certifications, and iXBRL formatted financial statements - Key exhibits filed include CEO/CFO certifications and iXBRL data files for the financial statements[119]