Qorvo Beats Q1 Earnings Estimates Despite Y/Y Lower Revenues

Core Insights - Qorvo, Inc. (QRVO) reported strong first-quarter fiscal 2026 results, with adjusted earnings and revenues exceeding Zacks Consensus Estimate [1] Revenue Performance - The company experienced a revenue contraction year over year, with net sales declining to $818.8 million from $886.7 million in the prior-year quarter, primarily due to declines in the Advanced Cellular Group (ACG) and Connectivity and Sensors Group (CSG) segments [2][5] - Despite the revenue decline, the top line surpassed the Zacks Consensus Estimate of $775 million, supported by solid demand trends in defense, aerospace, power management, Wi-Fi, and smartphones [2][5] Net Income - On a GAAP basis, net income was reported at $25.6 million or 27 cents per share, a significant increase from $0.4 million or break-even earnings in the prior-year quarter, attributed to lower costs of goods sold and operating expenses, along with an income tax benefit [3] - Non-GAAP net income was $86.5 million or 92 cents per share, compared to $83.5 million or 87 cents per share in the year-ago quarter, exceeding the Zacks Consensus Estimate by 30 cents [4] Segmental Performance - High Performance Analog (HPA) revenues increased to $137.4 million from $129.5 million in the year-ago quarter, driven by strong demand in defense and aerospace applications [6] - Revenues from CSG were $110.2 million, down from $114.9 million in the prior-year quarter, while ACG net sales were $571.2 million, reflecting an 11.1% year-over-year decline due to reduced Android revenues [7] Operating Metrics - Non-GAAP gross profit decreased to $360 million from $362.7 million, with respective margins of 44% and 40.9% [8] - Non-GAAP operating expenses fell to $251.8 million from $264.5 million year over year [8] - GAAP operating income was reported at $108.2 million, compared to $98.1 million in the prior-year quarter [9] Cash Flow & Liquidity - As of June 28, 2025, the company had $1.17 billion in cash and cash equivalents and $1.55 billion in long-term debt, generating $182.9 million in net cash from operating activities and a free cash flow of $145.4 million during the quarter [10] Outlook - For the second quarter of fiscal 2026, the company expects revenues of $1.025 billion (+/- $50 million) and non-GAAP gross margin to be within 48%-50%, with non-GAAP earnings projected at about $2.00 per share (+/- 25 cents) [11]