Skyworks(US:SWKS)2025-11-04 22:32Financial Data and Key Metrics Changes - Skyworks reported revenue of $1.1 billion for the fourth fiscal quarter of 2025, exceeding the high end of guidance, with earnings per share of $1.76 [10][11] - The company generated $1.1 billion of free cash flow for the full fiscal year, representing a 27% free cash flow margin [6][11] - Gross profit was $511 million, resulting in a gross margin of 46.5% [10][11] - Operating income reached $264 million, translating to an operating margin of 24% [11] Business Line Data and Key Metrics Changes - Mobile revenue accounted for 65% of total revenue, up 21% sequentially and 7% year-over-year, driven by strong sell-through at the top customer and growth in Android [10][11] - Broad markets revenue grew 3% sequentially and 7% year-over-year, supported by demand across edge IoT, automotive, and data center [10][11] Market Data and Key Metrics Changes - In edge IoT, Wi-Fi 7 adoption is accelerating, with strong demand for faster connectivity and lower latency [7][8] - The automotive business is experiencing robust design activity, with a record run rate exiting fiscal 2025 [8] - Data center infrastructure is rebounding as customer inventories normalize, with increasing design win activity for next-generation platforms [8][9] Company Strategy and Development Direction - The company is focused on long-term RF content growth driven by internal modem adoption, AI functionality, and higher RF complexity in smartphones [7] - A recent agreement to combine with Corvo is expected to add scale, diversification, and a complementary technology portfolio [6][9] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the mobile segment's performance, attributing it to better-than-expected unit sales and a favorable product mix [17][44] - The outlook for fiscal Q1 2026 anticipates revenue between $975 million and $1.025 billion, with a projected decline in mobile revenue [12][13] Other Important Information - The company ended the quarter with $1.4 billion in cash and investments and $1 billion in debt, maintaining a strong balance sheet [12] - Operating expenses were $247 million, slightly above guidance due to higher employee incentive accruals [11] Q&A Session Summary Question: What has changed regarding content loss at the largest customers? - Management noted that unit sales were better than expected, with a positive uptake from new phone models contributing to the strong results [17] Question: What structural changes were made in the sales team? - The company streamlined sales and marketing functions to enhance alignment between engineering and product roadmaps, focusing on revenue generation [19] Question: Are there opportunities for mergers or divestitures? - Management indicated that the Corvo deal provides both scale and diversification, and they do not expect major transformational activities in the interim [22][23] Question: What is the long-term growth outlook for the broad markets business? - Management expects the broad markets business to grow at a double-digit rate, driven by Wi-Fi advancements and automotive connectivity [35][36] Question: How is the company managing inventory going into a seasonally softer period? - The company anticipates some inventory build as they approach the end of the year, but overall inventory levels are running well [65]