Q4 2025 Earnings Summary
- Robust Content Wins and Upside: Qorvo has secured multi-year content wins—including envelope-tracking power management with its largest smartphone customer—that position it for greater than 10% year-over-year content growth and enhanced market share in premium mobile segments.
- Diversification into High-Growth Markets: The company is expanding beyond mobile into high-growth areas such as defense, aerospace, and ultra-wideband applications, with record revenue in its defense segment and a design win funnel exceeding $5 billion, which broadens its revenue base and mitigates cyclicality.
- Resilient Supply Chain and Tariff Mitigation: Management highlighted a flexible supply chain with multiple sourcing options and effective mitigation strategies against tariff pressures, ensuring minimal direct impact on costs and supporting margin stability.
- Tariff Uncertainty: Executives noted that while current tariff impacts are modest (approximately $1 million in the June quarter), there is uncertainty around potential escalations if exemptions expire—with estimates that a worst‐case scenario could increase costs by high single-digit millions per quarter, thereby putting pressure on margins.
- Dependence on Key Customers and Cyclical Exposure: The reliance on a limited number of large customers for a significant portion of revenue (with the largest customer accounting for about 43% of annual revenue) exposes the company to cyclical demand swings and potential pricing pressure, particularly in the volatile smartphone market.
- Transition Challenges from Exiting Low-Margin Business: The planned exit from lower-margin Android segments, which is expected to result in a $150–$200 million headwind, introduces near-term revenue uncertainty as the company shifts its focus toward new product categories and higher-margin opportunities.
| Metric | YoY Change | Reason |
|---|---|---|
Total Assets | -9.4% (from 6,554,635k to 5,933,131k) | **The 9.4% decline in Total Assets—approximately $621.5M—suggests that the company reduced its asset base, likely through divestitures, depreciation, or reduced capital investments relative to the higher base in Q4 2024. |
Total Liabilities | -15% (from 2,998,263k to 2,540,819k) | **A 15% reduction in Total Liabilities indicates effective debt repayment or restructuring initiatives, such as refinancing or repaying short- and long-term obligations, compared to Q4 2024's higher liabilities. |
Stockholders' Equity | -7% (from 3,651,067k to 3,392,312k) | **The 7% decline in Stockholders’ Equity appears to be driven by ongoing share repurchase programs and adjustments in retained earnings, reflecting a deliberate balance sheet optimization strategy that, while reducing equity, also aims to improve financial efficiency relative to the prior period. |
Cash and Cash Equivalents | Essentially Flat (from 1,029,258k to 1,021,176k) | **Stable cash levels indicate that the cash flows from operating, financing, and investing activities largely offset each other, maintaining liquidity at nearly the same level as in Q4 2024 despite other balance sheet adjustments. |
Net Cash Provided by Operating Activities | -1.6% (from 202,344k to 199,183k) | **A 1.6% drop (about $3.16M) in operating cash flow suggests minor adjustments in operational efficiency and working capital management; despite strong performance in Q4 2024, slight shifts in underlying revenue and expense timing led to lower net cash generation in Q4 2025. |
| Metric | Period | Previous Guidance | Current Guidance | Change |
|---|---|---|---|---|
Revenue | Q4 2025 | no prior guidance | Approximately $850 million ± $25 million | no prior guidance |
Non-GAAP Gross Margin | Q4 2025 | no prior guidance | Between 43% and 44% | no prior guidance |
Non-GAAP Diluted EPS | Q4 2025 | no prior guidance | Between $0.90 and $1.10 | no prior guidance |
Non-GAAP Operating Expenses | Q4 2025 | no prior guidance | Approximately $250 million | no prior guidance |
Nonoperating Expense | Q4 2025 | no prior guidance | Between $13 million and $15 million | no prior guidance |
Non-GAAP Tax Rate (Fiscal '25') | Q4 2025 | no prior guidance | Approximately 11% | no prior guidance |
Revenue | Q1 2026 | no prior guidance | Approximately $775 million ± $25 million | no prior guidance |
Non-GAAP Gross Margin | Q1 2026 | no prior guidance | Between 42% and 44% | no prior guidance |
Non-GAAP Diluted EPS | Q1 2026 | no prior guidance | Between $0.50 and $0.75 | no prior guidance |
Non-GAAP Operating Expenses | Q1 2026 | no prior guidance | Approximately $250 million | no prior guidance |
Nonoperating Expense | Q1 2026 | no prior guidance | Between $10 million and $12 million | no prior guidance |
Non-GAAP Tax Rate (Fiscal 2026) | Q1 2026 | no prior guidance | Between 18% and 19% | no prior guidance |
| Topic | Previous Mentions | Current Period | Trend |
|---|---|---|---|
Largest Customer Concentration | Q1 and Q3 discussions highlighted significant reliance on the largest customer (e.g., ~50% revenue in Q3 and seasonal ramp/multiyear investments in Q1 ). | Q4 emphasized a slightly lower concentration (largest customer at 43%), while reinforcing a multiyear content wins strategy to drive growth and margins. | Consistent focus with a refined revenue mix and a stronger push toward content wins. |
Content Wins | Q1 detailed model-specific content gains (e.g. Samsung S24, Google Pixel ) and Q3 discussed design wins and awards to support content growth. | Q4 highlighted robust content wins through fall and spring launches, expecting >10% year‑over‑year growth with durable multiyear opportunities. | Sustained and growing emphasis with clear target milestones and strengthened execution. |
Android Business Transition | In Q1, new product launches and ramp timing were mentioned , and Q3 focused on shifting away from low‐margin Android 5G segments toward premium offerings. | Q4 reiterated the strategic transition by exiting $150–200M of lower-margin Android business and focusing on premium/flagship segments. | A continued and more definitive strategic shift away from low‑margin, cyclical Android business toward premium segments. |
Smartphone Revenue Decline | Q1 noted a slight revenue decline due to mix and timing factors , and Q3 elaborated on declines driven by the Android exit and revenue concentration issues. | Q4 described revenue declines attributed to the exit from lower‑margin Android business, but noted mitigating factors like margin improvement and normalization of production to stock channels. | Ongoing revenue headwinds that are being managed through strategic repositioning toward higher margins. |
Diversification into High‑Growth Markets | Q1 and Q3 referenced expansion into defense, aerospace, ultra‑wideband, automotive, and AI/data centers – with design wins and initial growth momentum reported in these segments and. | Q4 reported record defense & aerospace revenue, significant progress in automotive connectivity, and expanded AI/data center engagements. | A persistent, increasingly successful diversification strategy that is starting to yield record results. |
Workforce Reductions | Q3 stressed sizable workforce reductions in the Android segment as part of cost management and restructuring. Q1 had limited discussion on this. | Q4 mentioned a “meaningful workforce reduction” executed late last year focused on the Android business, but with less emphasis compared to Q3. | Continued restructuring with reduced prominence, suggesting stabilization of the cost structure. |
New Product Development | Q1 provided detailed discussion on new product launches including LMH band pads, mid‑high band pads, and WiFi 7 FEM solutions. | Q4 did not include a distinct discussion on new product development, with such initiatives likely being integrated into broader content wins narratives. | Once a focal point in Q1, the standalone discussion has diminished in Q4, indicating integration into overall strategy. |
LMH Ramp Challenges | Q1 highlighted challenges with the timing of LMH product ramps and temporary revenue gaps. | No specific mention was made regarding LMH ramp challenges in Q4. | No longer emphasized, suggesting either resolution or deprioritization of earlier ramp timing issues. |
Supply Chain Resilience | Not mentioned in Q1 or Q3. | Q4 focused significantly on supply chain flexibility, highlighting mitigation measures, alternative sources, and a hybrid manufacturing footprint. | A newly emerging focus in Q4, reflecting increased attention to global trade uncertainties and operational resilience. |
Tariff Uncertainty | Absent from discussions in Q1 and Q3. | Q4 addressed a direct tariff impact of less than $1M – with commentary on potential increases if exemptions expire, underscoring vigilance amid a dynamic trade environment. | An emerging risk factor highlighted in Q4, showing cautious management of external trade uncertainties. |
Cyclical Exposure | Not explicitly discussed in Q1 or Q3. | Q4 noted efforts to reduce cyclical exposure by exiting volatile, lower‑margin segments, thereby stabilizing revenue streams. | A new strategic focus in Q4 aimed at reducing vulnerability to short‑term market fluctuations. |
Revenue Forecast Uncertainty | Not specifically addressed in Q1 or Q3. | Q4 acknowledged uncertainties impacting revenue forecasts due to factors such as tariffs and macroeconomic conditions, despite a stable outlook for fiscal 2026. | A new emphasis in Q4 reflecting a more cautious stance on forecast reliability amid external economic pressures. |
Cautious Sentiment on AI Smartphone Trends | Q1 featured a cautious commentary from Robert Bruggeworth on AI smartphone trends, noting that despite market excitement (e.g. with Samsung S24), the impact on demand was unclear. | Absent from the Q4 discussion; neither Q3 nor Q4 reiterated the cautious sentiment on AI smartphone trends. | Topic dropped in later periods, indicating a reduced focus or resolved uncertainty regarding AI's impact on smartphone demand. |
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Tariff Impact
Q: What are tariff impact assumptions?
A: Management explained that even in a worst‐case scenario, direct tariff costs would be in the high single-digit millions, with about $1 million in the June quarter reflecting historical run rates plus new tariffs. -
Tariff Strategy
Q: What steps mitigate tariff costs?
A: They are leveraging supply chain flexibility, alternative sourcing, and shifting production to tariff‐free zones to minimize exposure. -
Fiscal Guidance
Q: Is fiscal '26 guidance on track?
A: The company is repositioning its business by exiting low-margin Android and divesting non-core units, aiming for flat revenue and a 150 basis point gross margin expansion. -
OpEx Guidance
Q: Confirm quarterly OpEx level?
A: They reaffirm guidance at approximately $250 million per quarter, with modest seasonal variations of about ±2–3%. -
Customer Content
Q: Is content growth driven by baseband?
A: Management noted content gains stem from both internal baseband solutions and third-party integrations, bolstering long-term revenue with their largest customer. -
ET PMIC Details
Q: Is the ET PMIC sole-sourced?
A: They confirmed the ET PMIC remains sole-sourced, integral to the internal baseband strategy and crucial for sustained content growth over multiple years. -
Inventory Management
Q: How is inventory reduction progressing?
A: The team has made solid progress in lowering inventory levels, effectively unlocking free cash flow with no abnormal concerns impacting China-based demand. -
Tariff Normalization
Q: Are customers pulling demand forward due to tariffs?
A: There has been some pull-forward around new phone launches, but such effects are expected to normalize in the next quarter. -
Android Exit
Q: Is the Android exit headwind on track?
A: Officials confirmed that the expected $150–200 million headwind from exiting low-margin Android is unfolding as anticipated. -
D&A Growth
Q: What progress in the D&A run rate?
A: Management highlighted progress towards a $1 billion annual run rate in D&A, driven by a strong design win funnel and diversified product mix. -
HPA/CSG Outlook
Q: Are HPA and CSG growing double digits?
A: They remain confident that both HPA and CSG segments will deliver double-digit growth based on robust execution and expanding sales funnels. -
Content Guidance
Q: What drives the 10% content growth?
A: The forecasted 10% content increase is attributed to additional design wins and increased share in premium models, though detailed split assumptions were not fully disclosed. -
Pricing Pressure
Q: Any pricing squeeze with the largest customer?
A: Despite potential pricing headwinds, robust performance in premium segments and new model launches are expected to counterbalance any pressure. -
Android Decline
Q: When will Android decline occur?
A: While Android sales see a slight uptick in June due to seasonal factors, the overall trend is a gradual year-over-year decline as newer models ramp up. -
Module Locations
Q: How do module houses affect tariffs?
A: The recent closure of the Costa Rica facility helps streamline production without significantly shifting module assembly operations, which remain diversified. -
Tariff Demand Pull
Q: Is tariff-driven demand pull significant?
A: Management indicated that any tariff-related demand pull is minor in dollar terms, primarily affecting smartphones, and is not a major concern. -
Content Realization
Q: Are content gains materializing as forecast?
A: While the fall launch shows strong content gains, the spring model was more modest; overall, the content uplift is progressing on track.