• Revenue: $869 million for the March quarter.
• Non-GAAP Diluted Earnings Per Share (EPS): $1.42.
• Non-GAAP Gross Margin: 45.9% for the March quarter.
• Non-GAAP Operating Expenses: $247 million.
• Largest Customer Revenue Contribution: Approximately 43% of total revenue for the March quarter.
• Full Year Fiscal 2025 Revenue: $3.7 billion.
• Full Year Fiscal 2025 Non-GAAP Gross Margin: 45.2%.
• Cash and Equivalents: Approximately $1 billion at quarter end.
• Long-term Debt: Approximately $1.5 billion remaining.
• Net Inventory Balance: $641 million, a decrease of $15 million sequentially and $70 million year-over-year.
• Operating Cash Flow: Approximately $200 million for the fourth quarter.
• Capital Expenditures (CapEx): $29 million for the fourth quarter.
• Free Cash Flow: $171 million for the fourth quarter.
• Fiscal 2025 Free Cash Flow: $485 million.
• Shareholder Returns: Over $350 million returned via share repurchases in fiscal 2025.
• Debt Retirement: Over $400 million of debt retired in fiscal 2025.
• June Quarter Revenue Guidance: Approximately $775 million, plus or minus $25 million.
• June Quarter Non-GAAP Gross Margin Guidance: Between 42% and 44%.
• June Quarter Non-GAAP Diluted EPS Guidance: Between $0.50 and $0.75.
• June Quarter Non-GAAP Operating Expenses Guidance: Approximately $250 million.

• Warning! GuruFocus has detected 3 Warning Sign with QRVO.

Release Date: April 29, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Qorvo Inc (NASDAQ:QRVO) delivered strong financial results for the March quarter, exceeding the midpoint of guidance with revenue of $869 million and non-GAAP diluted earnings of $1.42 per share.
• The company achieved record revenue in its defense and aerospace business, with a sales funnel exceeding $5 billion, indicating strong future growth potential.
• Qorvo Inc (NASDAQ:QRVO) reported significant growth in its Ultra-Wideband sales funnel for automotive, which has grown by more than $500 million over the last 12 months.
• The company is executing strategic initiatives to improve performance, including expanding its product portfolio for its largest customer and achieving greater than 10% year-over-year content growth.
• Qorvo Inc (NASDAQ:QRVO) is making progress in reducing inventory levels, unlocking free cash flow, and maintaining a strong balance sheet with approximately $1 billion in cash and equivalents.

Negative Points

• Qorvo Inc (NASDAQ:QRVO) faces ongoing uncertainty surrounding tariffs and broader macroeconomic conditions, which could impact future financial performance.
• The company is experiencing a decline in its mass-tier Android business, with plans to exit $150 million to $200 million worth of lower-margin Android business.
• There is potential for indirect tariff impacts, which could affect the company's financial results, although the direct impact is currently estimated to be small.
• Qorvo Inc (NASDAQ:QRVO) is closing its facility in Costa Rica as part of its efforts to consolidate its manufacturing footprint, which may involve transition challenges.
• The company is navigating a dynamic and unpredictable tariff environment, which requires ongoing mitigation efforts and collaboration with customers to manage potential impacts.

Q & A Highlights

Q: Can you discuss the content growth with your largest smartphone customer and any potential pricing pressures? A: Frank Stewart, Senior Vice President, President - Advanced Cellular, explained that Qorvo is excited about the upcoming fall launch, having captured content across multiple product categories, including antenna tuning, switches, and filters. The company is also enjoying envelope tracking content in these models. Despite challenges in the mass market, Qorvo remains competitive in the premium flagship tier, with significant content wins in the Galaxy S25 and other models. Pricing pressures are more prevalent in the mass market, which Qorvo is exiting, while the premium segment remains focused on performance.

Q: How is Qorvo managing the impact of tariffs, and what are the assumptions regarding potential tariff impacts? A: Grant Brown, CFO, stated that Qorvo has mitigation measures in place and continues to leverage these tools. The company assumes a direct tariff-related impact of less than $1 million for the June quarter, with potential high single-digit millions per quarter if the worst-case scenarios materialize. Qorvo's hybrid manufacturing footprint and flexibility in supply chain management help mitigate tariff impacts, with a significant portion of production costs being external.

Q: What is the outlook for Qorvo's Defense and Aerospace (D&A) business, and what are the growth drivers? A: Philip Chesley, Senior Vice President, President - High Performance Analog, highlighted that Qorvo's D&A business has a $5 billion design win funnel, with a current run rate of around $400 million. Growth is driven by upgrades in radar, communications, electronic warfare, and missile applications. The DOD's focus on deterring China and alternative GPS, along with foreign military sales, presents significant opportunities. Qorvo's unique onshore RF technologies position it well in this space.

Q: How is Qorvo addressing the decline in the Android market, and what is the expected impact on revenue? A: Robert Bruggeworth, CEO, confirmed that Qorvo is on track with its strategy to exit the lower-margin Android business, expecting a $150 million to $200 million headwind. The company is focusing on premium and flagship tiers, with a decline in Android revenue anticipated year-over-year. Qorvo is seeing growth in other areas, such as its largest customer and defense and aerospace, to offset this decline.

Q: What are the expectations for Qorvo's High Performance Analog (HPA) and Connectivity and Sensors Group (CSG) businesses in fiscal year '26? A: Robert Bruggeworth, CEO, confirmed that both HPA and CSG are expected to grow double digits in fiscal year '26. Eric Creviston, President of Connectivity & Sensors, noted that growth in CSG is driven by high-performance WiFi, BLE matter, and ultra-wideband technologies. The automotive sector and connected home applications are significant growth areas for ultra-wideband, while WiFi continues to see content growth with transitions to newer standards.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.