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    Qorvo Inc (QRVO)

    Q2 2025 Earnings Summary

    Reported on Jan 28, 2025 (After Market Close)
    Pre-Earnings Price$100.48Last close (Oct 29, 2024)
    Post-Earnings Price$78.01Open (Oct 30, 2024)
    Price Change
    $-22.47(-22.36%)
    MetricPeriodGuidanceActualPerformance
    Revenue
    Q2 2025
    ~$1.025B ± $25M
    $1,046.5M
    Met
    1. Android Market Impact
      Q: How is the shift in Android affecting your revenue outlook?
      A: We expect fiscal '25 revenue to be down slightly compared to fiscal '24, by a few percentage points, due to a shift in Android 5G towards the entry-tier market. This shift has impacted unit volumes and content per model, especially with our largest Android customer where revenue in their highest volume fall models is less than last year. We're intentionally pivoting away from entry-tier areas that are more margin-compressed to focus on higher tiers and profitable mid-tier segments.

    2. Gross Margin Outlook
      Q: What is your long-term gross margin target amidst current headwinds?
      A: Despite current headwinds, there's no change to our long-term gross margin guidance of 50% plus. In fiscal '25, we expect margins in the mid-40% range, comparable to last year. Near-term margins are impacted by mix shifts to entry-tier Android devices and underutilization charges, but structural changes like moving to 8-inch BAW and shifting capacity will help us reach our target.

    3. Pricing Discipline and Revenue Mix
      Q: Are you changing your strategy in the entry-tier Android market?
      A: Yes, we're exercising pricing discipline and have chosen not to compete in the entry-tier Android market due to compressed margins. This decision leads to a reduction of approximately $1 billion in TAM, but allows us to focus on profitable segments. We're shifting resources to areas where we add the most value and can maintain healthier margins.

    4. Strategic Shift and Diversification
      Q: How are you adjusting your business strategy amid market changes?
      A: We're reallocating R&D dollars to Defense & Aerospace (D&A), Power Management, and High Performance Analog (HPA). Our D&A business is now larger than our China Android-based cellular business. We're also investing in ultra-wideband, automotive, and maintaining our share in Wi-Fi within our Connectivity and Sensors Group (CSG), aiming for double-digit growth in both HPA and CSG this year.

    5. Long-Term Growth Expectations
      Q: Has the Android market shift affected your long-term growth targets?
      A: No, we're still confident in achieving a strong single-digit growth rate in our Mobile Products segment (ACG). We believe we can grow this business even as the wider Android market declines.

    6. Seasonality Expectations
      Q: What are your expectations for the upcoming March quarter?
      A: For modeling purposes, we anticipate being down 5% to 10% sequentially in the March quarter, which aligns with typical seasonality. While ACG may decline due to seasonal factors, we expect substantial growth in HPA and growth in CSG during this period.

    7. Operating Expense Reductions
      Q: How are you managing operating expenses in light of revenue changes?
      A: We've reduced OpEx to reflect changes in the Android business, focusing resources on the best investment areas. This realignment ensures we're utilizing our resources efficiently and positioning ourselves for long-term profitability.

    8. Content Variation with Largest Customer
      Q: Does your content vary across different models for your largest customer?
      A: Yes, our content varies by model and SKU with our largest customer, affecting overall content levels based on product mix. This variation is consistent with prior years and influences our revenue depending on the sales mix.

    9. Growth in SAW Filters
      Q: Do you anticipate growth in SAW filter opportunities?
      A: Yes, we're seeing growth in SAW filters, particularly with our next-generation LRT SAW technology performing well in mid-band and high-band spectrums. This opens up opportunities across various frequency bands and is available to all customers, not just limited to Android devices.

    10. Exposure to Entry-Tier Android Market
      Q: How significant is your exposure to the entry-tier Android market now?
      A: Our revenue from China-based Android is now under $100 million and expected to trend lower in fiscal '26, reducing our exposure significantly. We've seen a 75% decline from the peak in China Android revenue and are focusing on more margin-accretive opportunities moving forward.