Qorvo, Inc. (QRVO)·Q1 2026 Earnings Summary

Executive Summary

• Q1 FY26 delivered above-guide revenue and EPS on stronger demand and early benefits from cost actions; revenue was $818.8M (−7.7% y/y, −5.8% q/q), GAAP EPS $0.27 and non-GAAP EPS $0.92 . Versus S&P Global consensus, revenue beat by ~5.5%* ($818.8M vs $776.5M*) and EPS beat by ~46%* ($0.92 vs $0.63*) as iPhone content gains and defense strength offset Android mix .
• Guidance for Q2 FY26: revenue $1.025B ± $50M, non-GAAP GM 48–50%, and non-GAAP EPS $2.00 ± $0.25; GM implies ~+200 bps y/y expansion; tax-rate guidance lowered to ~15% for FY26 (from 18–19%) .
• Strategic portfolio/factory moves continue: exiting low-margin Android mass tier, divested SiC, closing Costa Rica (2026) and a Greensboro fab while moving SAW to Richardson, TX; annual COGS savings post start-up expected to exceed FY26 start-up costs ($10–$20M) .
• Stock catalysts: durable >10% content uplift at the largest customer for fall launch, defense funnel stepping up by ~$2B to >$7B, and Q2 GM inflection toward high-40s; watch CSG auto UWB SoC pushout and tariff-related noise into Android for near-term volatility .

What Went Well and What Went Wrong

• What Went Well

  • Content expansion and execution at largest customer: “more than 10% year over year content growth on the ramping platform,” with the ET PMIC a durable multi-year content opportunity; largest customer was ~41% of Q1 revenue .
  • Defense & Aerospace momentum: sales funnel increased by ~$2B q/q to >$7B, supported by increased US and allied defense spending; breadth across radar, SATCOM, EW, missile defense; new GaN K-band PA for LEO constellations .
  • Gross margin trajectory: Q1 non-GAAP GM 44% (+310 bps y/y) and Q2 guide 48–50% (+200 bps y/y midpoint) as cost actions, mix shift away from low-margin Android, and factory consolidation progress .

• What Went Wrong

  • Android headwinds and mix: ACG Android revenue down 18% y/y to ~$240M; China Android just under $100M and trending lower as the exit from mass-tier continues .
  • CSG growth revision: auto UWB SoC program delayed into FY27; FY26 CSG growth now “low single digits” versus prior 10–12% .
  • Tariff/macro pockets: limited component buffering (~$15–$30M) and some pushouts in motor-control for power tools/garden equipment due to tariff uncertainty .

Financial Results

• Results vs S&P Global consensus for Q1 FY26: Revenue $818.8M vs $776.5M*; EPS $0.92 vs $0.629*; EBITDA $103.3M* actual vs $127.7M* consensus (company does not guide EBITDA) .
• Values retrieved from S&P Global.*

Segment performance (GAAP):

KPIs (Q1 FY26)

• Largest customer % of revenue: ~41%
• Android revenue: ~$240M; China Android just under $100M
• Free Cash Flow: $145.4M
• Cash & Equivalents: $1,165.5M
• Net inventory balance: ~$638M
• Diluted shares: 93.8M

Guidance Changes

Note: Q2 FY26 company guidance vs S&P Global consensus: Revenue midpoint $1.025B vs $1.0366B*; EPS midpoint $2.00 vs $2.11* (slightly below consensus midpoints). Values retrieved from S&P Global.*

Earnings Call Themes & Trends

Management Commentary

• “Qorvo’s envelope tracking PMIC for [our largest customer] has been custom developed to pair with their internal baseband, and this represents a durable multi year content opportunity.” — CEO Bob Bruggeworth .
• “Our defense and aerospace sales funnel increased approximately $2,000,000,000 sequentially to over $7,000,000,000…reflects a sharp increase in both U.S. and international defense spending.” — CEO Bob Bruggeworth .
• “Qorvo’s fiscal first quarter revenue and non-GAAP EPS exceeded the high-end of guidance…Q2 non-GAAP gross margin guidance of 48%–50% would represent a 200 basis-point improvement versus last year at the midpoint.” — CFO Grant Brown .
• “In fiscal twenty twenty six, we expect non-GAAP OpEx related to the startup costs for the Texas SAW line of $10,000,000 to $20,000,000…annual savings in non-GAAP COGS for each year after the new line goes live will exceed the one time startup costs.” — CFO Grant Brown .
• “During the quarter, our largest customer represented approximately 41% of revenue.” — CFO Grant Brown .

Q&A Highlights

• Seasonality and content at the largest customer: Management expects typical Sep>Dec seasonality, with >10% y/y content growth on fall ramp; full-year view remains conservative given macro/tariff uncertainty .
• Gross margin drivers: Primary improvements from cost reductions and factory actions, plus accretive mix (D&A growth, exit from dilutive businesses); these trends continue into Q2 .
• Android dynamics: Some limited tariff-related buffering ($15–$30M) mostly in Android; China Android down sequentially ~$30–$40M in Q2 and down again in Q3 as exit progresses .
• CSG outlook revised: Auto UWB SoC program delayed to FY27; CSG FY26 growth now low-single digits vs prior 10–12% .
• Footprint consolidation: Greensboro fab closure and SAW transfer to Richardson, TX; Costa Rica closure remains on track; benefits to begin late FY27 .

Estimates Context

• Q1 FY26 actual vs S&P Global consensus: Revenue $818.8M vs $776.5M* (beat ~5.5%); non-GAAP EPS $0.92 vs $0.63 (beat ~46%); EBITDA $103.3M vs $127.7M* (miss). Values retrieved from S&P Global.*
• Q2 FY26 guidance vs consensus: Revenue midpoint $1.025B vs $1.0366B* (slightly below); EPS midpoint $2.00 vs $2.11* (slightly below). Values retrieved from S&P Global.*
• Implication: Street may need to raise Q1 actuals into models (revenue/EPS beats), but Q2 guidance slightly under consensus midpoints tempers near-term revisions, with margin mix a key debate into 2H.

Key Takeaways for Investors

• Near-term: Q2 guide points to a gross margin inflection (48–50%) despite only modestly below-consensus revenue/EPS midpoints; stock likely trades on confidence in structural margin story rather than top-line alone .
• Content-led resilience: >10% y/y content growth at the largest customer, alongside a multi-year ET PMIC opportunity and additional RF pathways, supports durability through smartphone cycles .
• Defense as a second growth engine: D&A funnel stepped up to >$7B with broad program breadth; mix shift to higher-margin franchises underpins margin expansion .
• Android de-risking: Continued exit of mass-tier Android should compress headline Android revenues but improve blended margins and earnings quality over time .
• CSG recalibration: Auto UWB SoC delay pushes growth to FY27; watch Wi-Fi 7/8 attach and enterprise UWB deployments to bridge the gap .
• Cost/footprint actions: Greensboro/Costa Rica closures and SAW relocation set the stage for additional COGS savings post start-up; margin tailwinds build into late FY27 .
• Watchlist into prints: Defense order conversion cadence, Android mix normalization as tariff noise abates, and confirmation of high-40s GM in Q2 as key stock-moving checkpoints .

Values retrieved from S&P Global.*