Executive Summary

Q3 FY2025 delivered revenue of $916.3M, non-GAAP gross margin of 46.5%, and non-GAAP EPS of $1.61; the company exceeded the midpoint of its non-GAAP guidance for revenue, gross margin, and EPS for the December quarter .
Guidance for Q4 FY2025: revenue ~$850M ±$25M, non-GAAP gross margin 43–44%, and non-GAAP diluted EPS $0.90–$1.10; non-GAAP OpEx ~$250M and nonoperating expense $13–$15M; FY2025 non-GAAP tax rate ~11%, rising to 18–19% in FY2026 .
Mix shift in Android toward entry-tier devices continues to pressure ACG near term; management is exiting lower-margin Android mass-tier, focusing on flagship/premium and largest customer content gains; HPA (Defense & Aerospace) posted a record quarter and is expected to remain strong in March .
Strategic actions (SiC divestiture, workforce and digital transformation streamlining, factory footprint optimization) are aimed at supporting high-40s gross margin in seasonally strong quarters of FY2026 and up to ~50% in FY2027; management sees over $100M in annualized savings across COGS and OpEx .

What Went Well and What Went Wrong

What Went Well
- Record Defense & Aerospace revenue in HPA; sequential strength across D&A, industrial/enterprise, and infrastructure; continued strength expected in March quarter .
- Non-GAAP execution beat: December quarter exceeded the midpoint of revenue, gross margin, and EPS guidance; free cash flow rose to $176.3M on $214.1M operating cash flow .
- Strategic portfolio actions: exiting mass-tier Android, divesting SiC business, relocating GaAs production to Oregon, and leveraging outsourced partners to expand margins and reduce variability .
What Went Wrong
- Sequential revenue decline to $916.3M from $1,046.5M due to seasonality and Android mix pressures; non-GAAP gross margin dipped slightly to 46.5% from 47.0% .
- CSG revenue declined sequentially to $109.5M (from $146.8M), with mobile softness and timing headwinds; automotive revenue was down sequentially amid end-market softness .
- Near-term tax and seasonality headwinds: non-GAAP tax rate expected to rise to 18–19% in FY2026; June quarter modeled down 10–15% sequentially given D&A seasonality and smartphone ramps .

Financial Results

Metric	Q1 FY2025	Q2 FY2025	Q3 FY2025
Revenue ($USD Millions)	$886.7	$1,046.5	$916.3
Gross Margin % (GAAP)	37.5%	42.6%	42.7%
Gross Margin % (Non-GAAP)	40.9%	47.0%	46.5%
Operating Income ($USD Millions, GAAP)	$4.6	$9.7	$53.0
Operating Income ($USD Millions, Non-GAAP)	$98.1	$212.2	$177.9
Diluted EPS (GAAP, $)	$0.00	$(0.18)	$0.43
Diluted EPS (Non-GAAP, $)	$0.87	$1.88	$1.61
Free Cash Flow ($USD Millions)	$42.9	$94.8	$176.3

Segment revenue breakdown

Segment Revenue ($USD Millions)	Q1 FY2025	Q2 FY2025	Q3 FY2025
HPA	$129.5	$148.3	$171.7
CSG	$114.9	$146.8	$109.5
ACG	$642.3	$751.4	$635.1

KPIs

KPI	Q1 FY2025	Q2 FY2025	Q3 FY2025
Operating Cash Flow ($USD Millions)	$81.1	$127.8	$214.1
Capital Expenditures ($USD Millions)	$38.2	$33.0	$37.8
Cash & Equivalents ($USD Millions)	$1,082.4	$1,096.5	$769.4
Inventories ($USD Millions)	$726.6	$694.5	$656.2
Long-Term Debt ($USD Millions)	$1,549.3	$1,549.2	$1,549.2
Weighted-Average Diluted Shares (M)	96.5	94.9	95.0

Vs prior guidance (December quarter actual vs Q2 guide)

Metric	Prior Guidance (Q2 FY2025)	Actual (Q3 FY2025)	Outcome
Revenue ($USD Millions)	~$900 ±$25	$916.3	Beat midpoint
Non-GAAP Gross Margin %	~45%	46.5%	Beat midpoint
Non-GAAP EPS ($)	$1.10–$1.30	$1.61	Beat midpoint

Note: S&P Global consensus estimates were unavailable for this period via our data access; comparisons anchored to company guidance .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	Q4 FY2025	N/A	~$850M ±$25M	First issued
Non-GAAP Gross Margin %	Q4 FY2025	N/A	43–44%	First issued
Non-GAAP Diluted EPS ($)	Q4 FY2025	N/A	$0.90–$1.10	First issued
Non-GAAP Operating Expenses ($M)	Q4 FY2025	~$265 (Dec qtr)	~$250	Lowered
Nonoperating Expense ($M)	Q4 FY2025 / run-rate	+$3–$4M increase in March vs run rate (post notes retirement)	$13–$15 per quarter	Raised
Non-GAAP Tax Rate	FY2025 / FY2026	FY2025: 10–12%	FY2025: ~11%; FY2026: 18–19%	Raised (FY2026)
HPA segment growth	FY2025 & FY2026	Mid-teens FY2025	Double-digit FY2025 and next fiscal year	Maintained/affirmed
CSG segment growth	FY2025 & FY2026	Mid-teens FY2025	Double-digit FY2025 and next fiscal year	Maintained/affirmed
ACG segment outlook	FY2026	LT mid/high single-digit (Investor Day)	Single-digit decline in FY2026; return to growth in FY2027	Lowered near term
SiC revenue	Q4 FY2025	~$30M in FY2025 (full year)	Negligible in Q4 vs $9M in Q3	Lowered

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 & Q1)	Current Period (Q3)	Trend
Android mix shift & exit mass-tier	Mix shifted toward entry-tier; intentional pricing discipline and factory/OpEx reductions; TAM reset approx $1B; China Android ~$100M/quarter trending lower	Exiting lower-margin mass-tier; Android 5G in ACG ~$875M FY2025, declining ~$150–$200M in FY2026 and again FY2027; remainder focused on premium/flagship	Deteriorating near term
Largest customer (Apple) content & seasonality	Content gains anticipated; September guide conservative; seasonality typical; Q3 guide ~900; ACG down in March; LT opportunities in RF/PMIC	Q4 sales “down less than prior years”; FY2026 revenue at largest customer flat to up modestly; content skewed to Pro/Pro Max	Stable to improving LT
Gross margin trajectory	Mid-40s for FY2025; structural actions (8-inch BAW, consolidation, outsourcing) to improve GM	High-40% in seasonally strong FY2026 quarters; ~150bps expansion FY2026 on flat revenue; up to ~50% in FY2027	Improving
HPA (Defense & Aerospace)	Design activity record; SATCOM, AESA radar; mid-teens FY2025 growth	Record D&A quarter; stronger March; ~$400M DNA business; pronounced seasonality (June down)	Strong but seasonal
UWB adoption (auto/enterprise)	UWB in smartphones (Moto X50 Ultra) and enterprise access points; matter + UWB use cases	Auto-qualified UWB SoC (QPF5100Q) sampling; multiple auto use cases; enterprise AP anchors	Expanding
Digital transformation & OpEx actions	~$40M FY2025 digital transformation spend; footprint optimization; Luxshare transitions	Streamlined scope; other OpEx ~$1–$2M/quarter in FY2026; workforce reductions; >$100M annualized savings targeted	Cost-down progress
Broadband/Base stations	DOCSIS 4.0 launches and products; base station engagement	DOCSIS 4.0 deployments; base station stabilization post correction; India opportunities	Recovering
Tax rate outlook	FY2025 non-GAAP tax 10–12%; rising over time	FY2025 ~11%; FY2026 18–19% expected amid new regulations	Headwind
Factory footprint & outsourcing	Move GaAs to Oregon; 8-inch BAW complete; outsource where merchant foundry exists	Continue optimizing footprint; manufacture internally where differentiates (e.g., filters); leverage partners for scale	Ongoing optimization

Management Commentary

“Qorvo is executing on a broad set of strategic initiatives to expand margin, generate strong free cash flow, and increase shareholder value… our largest customer represented approximately 50% of sales… HPA had record Defense & Aerospace quarterly revenue” — Bob Bruggeworth, CEO .
“We took proactive steps to change how we support our Android business… divested our silicon carbide business… actions… expected to support a high-40% gross margin in seasonally strong quarters of fiscal 2026 and additional gross margin improvement in fiscal 2027” — Grant Brown, CFO .
“We expect revenue of approximately $850 million, plus or minus $25 million, non-GAAP gross margin between 43% and 44%, and non-GAAP diluted EPS between $0.90 and $1.10… non-GAAP tax rate for fiscal ’25 ~11%, rising to 18–19% in fiscal ’26” — Grant Brown, CFO .
“We narrowed our focus to the premium and flagship tiers to increase profitability and reduce variability… we expect Android 5G to decline gradually by approximately $150 million to $200 million annually in fiscal ’26 and again in fiscal ’27” — Bob Bruggeworth, CEO .

Q&A Highlights

Android exposure and trajectory: FY2025 Android 5G ~$875M in ACG, declining ~$150–$200M in FY2026 and FY2027, with premium/flagship focus; China-based Android trending toward ~$50M/quarter longer term .
HPA/D&A seasonality and magnitude: D&A now ~$400M business, stronger March, June down potentially ~$75M; record December quarter; multi-year tailwinds in AESA radar, SATCOM, onshoring .
Largest customer content/mix: content skewed to Pro/Pro Max; FY2026 flat to modestly up revenue; potential future gains tied to integrated modules and PMIC if internal baseband materializes .
Gross margin levers: exit low-margin Android, factory footprint optimization, outsourcing scale, process improvements; workforce reductions support structural margin expansion .
June quarter color: modeled down 10–15% sequentially at the total company level due to D&A seasonality and smartphone ramps .
Tax rate: non-GAAP tax expected to rise to 18–19% in FY2026, reflecting regulatory changes .

Estimates Context

S&P Global Wall Street consensus data was unavailable via our access window for Q3/Q4 FY2025; as a result, estimate-based beat/miss analysis could not be performed. We instead benchmarked actual results against company guidance: Q3 revenue ($916.3M), non-GAAP GM (46.5%), and non-GAAP EPS ($1.61) exceeded the midpoint of prior guidance for the December quarter .
Management’s Q4 FY2025 guidance (revenue ~$850M ±$25M; non-GAAP GM 43–44%; EPS $0.90–$1.10) sets the near-term expectation baseline .

Key Takeaways for Investors

Near-term setup: December quarter beat guidance midpoints, but March is guided lower on typical seasonality with D&A up and smartphone exposure down; June modeled down 10–15% sequentially — watch mix and HPA seasonality in positioning .
Margin thesis: structural actions (SiC exit, Android mass-tier exit, footprint optimization) support high-40% gross margins in FY2026 seasonally strong quarters and up to ~50% in FY2027; monitor execution milestones and OpEx discipline (target ~$250M/quarter in FY2026) .
Segment mix: HPA/D&A is a bright spot with record quarter and stronger March; CSG variability persists (Wi-Fi ramps timing), while ACG declines near term but focuses on flagship/premium and largest customer content .
Largest customer exposure: content skew to Pro/Pro Max and broader program engagement provides a path to flat-to-modest growth in FY2026 despite Android pressure; integrated module and PMIC opportunities could be incremental catalysts .
Android reset: management reaffirmed Android TAM reset and unwillingness to chase entry-tier pricing; expect revenue declines in Android over FY2026–FY2027 but improved margin mix — important for medium-term valuation rerating on quality of earnings .
Cash flow and capital allocation: free cash flow ramped to $176.3M; debt maturities addressed; buybacks continued (Q3 ~$100M); capital allocation balances growth investments and returns — supports downside protection in volatile handset cycles .
Risk watch: rising FY2026 tax rate (18–19%) and June quarter seasonality are headwinds; execution on factory/outsourcing and premium/flagship wins is critical to achieve margin targets .

Appendix: Other Relevant Press Releases

onsemi completed acquisition of Qorvo’s SiC JFET portfolio for $115M (Jan 15, 2025), aligning with Qorvo’s exit and margin-accretive strategy .
Automotive-qualified UWB SoC (QPF5100Q) sampling, targeting Digital Key, child presence detection, and motion sensing; production later in the year (Jan 7, 2025) .

Non-GAAP Adjustments and Impact

Q3 FY2025 non-GAAP reconciliations exclude stock-based comp, amortization, restructuring charges ($68.1M), acquisition/integration costs, terminated capacity reservation adjustments, and other items; these adjustments materially lifted non-GAAP operating income and EPS vs GAAP .
Q2 FY2025 included $96.458M goodwill impairment; Q3 had none; ongoing restructuring and digital transformation spend flow through “other operating expense” lines as detailed in reconciliations .

Cross-references: All numerical and qualitative claims above cite Q3 FY2025 8-K press release and financial tables, the Q3 FY2025 earnings call transcript, and prior two quarters’ filings and calls, as indicated.

Qorvo, Inc. (QRVO)·Q3 2025 Earnings Summary