Qorvo Q3 Earnings Surpass Estimates Despite Lower Revenues

Core Insights - Qorvo, Inc. reported strong third-quarter fiscal 2025 results, with adjusted earnings and revenues exceeding Zacks Consensus Estimates [1] Financial Performance - The company reported a net income of $41.3 million or 43 cents per share, a significant recovery from a net loss of $126.9 million or $1.31 per share in the prior-year quarter [3] - Non-GAAP net income was $152.8 million or $1.61 per share, down from $205.9 million or $2.10 per share year-over-year due to soft revenues, but still surpassed Zacks Consensus Estimates by 41 cents [3] - Revenues declined to $916.3 million from $1.07 billion in the prior-year quarter, impacted by macroeconomic headwinds and demand recovery challenges [4] Segment Performance - The Advanced Cellular Group (ACG) reported net sales of $635.1 million, down 24.9% year-over-year, but exceeded the Zacks Consensus Estimate of $611.2 million [8] - High-Performance Analog (HPA) revenues increased to $171.7 million from $118.9 million year-over-year, surpassing the Zacks Consensus Estimate of $168.1 million [5] - Connectivity Solutions Group (CSG) revenues were $109.5 million, slightly up from $108.9 million year-over-year, but fell short of the Zacks Consensus Estimate of $121.1 million [7] Operational Metrics - Non-GAAP gross profit decreased to $426.3 million from $470.5 million year-over-year, with margins of 46.5% and 43.8% respectively [9] - Non-GAAP operating expenses rose to $248.4 million from $234 million a year ago due to increased investments in new product development [9] Cash Flow and Liquidity - As of December 28, 2024, Qorvo had $769.43 million in cash and cash equivalents and $1.55 billion in long-term debt [11] - The company generated $214.1 million in net cash from operating activities, with a free cash flow of $176.3 million [11] - Qorvo repurchased $100 million worth of shares at an average price of $73 per share during the quarter [11] Future Outlook - For the fourth quarter of fiscal 2025, Qorvo expects revenues of approximately $850 million (+/- $25 million) and non-GAAP gross margin between 43% and 44% [12] - Non-GAAP earnings per share are projected to be in the range of 90 cents to $1.10, with operating expenses expected to be around $250 million [12] - For fiscal 2025, management anticipates revenues to be slightly down compared to fiscal 2024, primarily due to challenges in the smartphone business [13]