Skyworks Q1 Earnings Top Estimates, Revenues Down Y/Y, Shares Rise

Core Insights - Skyworks Solutions (SWKS) reported first-quarter fiscal 2026 non-GAAP earnings of $1.54 per share, exceeding the Zacks Consensus Estimate by 10.20% but down 3.8% year over year [1] - Revenues for the quarter were $1.04 billion, a decrease of 3.1% year over year, yet surpassing the consensus estimate by 3.68% [1] - SWKS shares increased by 0.46% in pre-market trading [1] Revenue Breakdown - Mobile revenues accounted for nearly 62% of total revenues, with the largest customer contributing approximately 67% of revenues in the reported quarter [2] - Broad Markets, which includes edge IoT, automotive, industrial, infrastructure, and cloud, experienced a sequential growth of 4% and an 11% year-over-year increase, driven by sectors such as edge IoT, automotive, and data center [2] Operating Performance - The non-GAAP gross margin for the first quarter was 46.6%, up 10 basis points year over year [3] - Research & development expenses rose by 310 basis points year over year to 19.6% of revenues [3] - Selling, general, and administrative expenses increased by 270 basis points to 10.5% in the reported quarter [3] - Non-GAAP operating margin contracted by 230 basis points year over year to 24.3% [3] Financial Position - As of January 2, 2026, cash and cash equivalents along with marketable securities totaled $1.57 billion, up from $1.39 billion as of October 3, 2025 [4] - Long-term debt was reported at $996.2 million, a slight increase from the previous quarter [4] - Cash generated by operating activities was $395.5 million, compared to $200 million in the prior quarter [4] - Free cash flow reached $339 million, resulting in a free cash flow margin of 32.7% [4] Future Guidance - For the second quarter of fiscal 2026, the company anticipates revenues between $875 million and $925 million [5] - A sequential decline of approximately 20% in Mobile revenues is expected, while Broad Markets are projected to remain flat sequentially, representing 44% of revenue, with a high single-digit year-over-year increase [5] - Gross margin is forecasted to be between 44.5% and 45.5%, with operating expenses estimated between $230 million and $240 million [5]