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Qorvo Q3 Earnings Surpass Estimates Despite Lower Revenues
QRVOQorvo(QRVO) ZACKS· ZACKS·2025-01-29 13:35

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 41.3millionor43centspershare,asignificantrecoveryfromanetlossof41.3 million or 43 cents per share, a significant recovery from a net loss of 126.9 million or 1.31pershareintheprior−yearquarter[3]−Non−GAAPnetincomewas1.31 per share in the prior-year quarter [3] - Non-GAAP net income was 152.8 million or 1.61pershare,downfrom1.61 per share, down from 205.9 million or 2.10pershareyear−over−yearduetosoftrevenues,butstillsurpassedZacksConsensusEstimatesby41cents[3]−Revenuesdeclinedto2.10 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 1.07billionintheprior−yearquarter,impactedbymacroeconomicheadwindsanddemandrecoverychallenges[4]SegmentPerformance−TheAdvancedCellularGroup(ACG)reportednetsalesof1.07 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 611.2million[8]−High−PerformanceAnalog(HPA)revenuesincreasedto611.2 million [8] - High-Performance Analog (HPA) revenues increased to 171.7 million from 118.9millionyear−over−year,surpassingtheZacksConsensusEstimateof118.9 million year-over-year, surpassing the Zacks Consensus Estimate of 168.1 million [5] - Connectivity Solutions Group (CSG) revenues were 109.5million,slightlyupfrom109.5 million, slightly up from 108.9 million year-over-year, but fell short of the Zacks Consensus Estimate of 121.1million[7]OperationalMetrics−Non−GAAPgrossprofitdecreasedto121.1 million [7] Operational Metrics - Non-GAAP gross profit decreased to 426.3 million from 470.5millionyear−over−year,withmarginsof46.5470.5 million year-over-year, with margins of 46.5% and 43.8% respectively [9] - Non-GAAP operating expenses rose to 248.4 million from 234millionayearagoduetoincreasedinvestmentsinnewproductdevelopment[9]CashFlowandLiquidity−AsofDecember28,2024,Qorvohad234 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 1.55billioninlong−termdebt[11]−Thecompanygenerated1.55 billion in long-term debt [11] - The company generated 214.1 million in net cash from operating activities, with a free cash flow of 176.3million[11]−Qorvorepurchased176.3 million [11] - Qorvo repurchased 100 million worth of shares at an average price of 73pershareduringthequarter[11]FutureOutlook−Forthefourthquarteroffiscal2025,Qorvoexpectsrevenuesofapproximately73 per share during the quarter [11] Future Outlook - For the fourth quarter of fiscal 2025, Qorvo expects revenues of approximately 850 million (+/- 25million)andnon−GAAPgrossmarginbetween4325 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]