Core Viewpoint - Qorvo reported a decline in revenue for FY26Q1, but exceeded previous performance guidance in terms of revenue, gross margin, and earnings per share [2][9] Financial Performance - FY26Q1 revenue was $819 million, down 7.63% year-over-year and 5.86% quarter-over-quarter; Non-GAAP gross margin was 44%; Non-GAAP diluted earnings per share was $0.92; Non-GAAP net profit was $86 million, up 2.38% year-over-year but down 35.33% quarter-over-quarter [2][9] - The company had a net inventory balance of $638 million, a decrease of $89 million year-over-year [2][9] Segment Performance - In FY26Q1, revenue from the ACG, HPA, and CSG segments was $571 million, $137 million, and $110 million respectively; ACG revenue declined 11.06% year-over-year and 1.6% quarter-over-quarter; HPA revenue increased 6.2% year-over-year but decreased 26.7% quarter-over-quarter; CSG revenue decreased 4.3% year-over-year but increased 8.9% quarter-over-quarter [3][12][15] - The defense and aerospace sector showed strong double-digit growth, driven by increased defense spending from the U.S. and allied nations, with expectations for continued year-over-year growth [3][12] Business Outlook - For FY26Q2, the company expects revenue of $1.025 billion (with a variance of $50 million), down 2.1% year-over-year but up 25.15% quarter-over-quarter; Non-GAAP gross margin is projected to be between 48% and 50% [4][10] - The company plans to exit low-margin businesses, which is expected to improve overall gross margins; the ACG segment is anticipated to see a slight decline in revenue, while CSG is expected to achieve low single-digit growth [4][11] Strategic Initiatives - The company is optimizing its business layout and has closed or is in the process of closing facilities in North Carolina and Costa Rica, reallocating production to higher-utilization wafer fabs, which is expected to positively impact gross margins [4][16] - Qorvo is focusing on high-value product categories and has made significant strides in expanding its defense and aerospace business, with potential opportunities exceeding $20 billion in the sales pipeline [3][19][33] Market Developments - The company has secured design wins in the automotive sector, including partnerships with leading manufacturers for ultra-wideband technology [17] - In the consumer electronics market, Qorvo has won design orders for Wi-Fi 7 modules for augmented reality glasses and is supporting major AR and VR headset suppliers [18] - The defense and aerospace market continues to expand, with a sales pipeline exceeding $7 billion, driven by U.S. defense budget increases and strategic importance to the Department of Defense [19][33]