SKYWORKS SOLUTIONS, INC. (SWKS) Q2 2025 Earnings Summary

Executive Summary

Revenue $953.2M and non-GAAP diluted EPS $1.24; GAAP diluted EPS $0.43. Gross margin 46.7% non-GAAP (41.1% GAAP). Management said revenue, gross margin and EPS exceeded the midpoint of guidance, with robust cash generation and record capital return over $600M via buybacks and dividends .
Mix: Mobile was 62% of revenue (down 17% sequentially as expected seasonality); Broad Markets grew 2% sequentially and 3% YoY, supported by Wi‑Fi 7, automotive, and edge IoT momentum .
Q3 FY25 guidance: revenue $920–$960M; non‑GAAP EPS of $1.24 at the midpoint; gross margin 46–47%; OpEx $220–$230M; other income ~$5M; tax rate ~13%; diluted share count ~152M. Mobile to decline low-single digits sequentially; Broad Markets up sequentially; dividend declared at $0.70 per share (paid June 17, 2025) .
Leadership changes announced: Mark Dentinger named CFO effective June 2, 2025; Todd Lepinski named SVP Sales & Marketing. CFO Kris Sennesael stepping down May 9, 2025. Management emphasized continuity and execution focus .
Stock narrative catalysts: record capital return, resilient gross margins despite seasonal mobile decline, Broad Markets momentum, and leadership transitions; tariff impacts assessed as immaterial in current guidance .

What Went Well and What Went Wrong

What Went Well

Non-GAAP gross margin of 46.7% exceeded expectations, driven by favorable mix and cost/operational efficiencies; non-GAAP operating margin at 23.3% with strong free cash flow ($371M; 39% margin) .
Broad Markets delivered fifth straight quarter of sequential growth and positive YoY trends; demand signals firming, bookings improving, channel inventory normalizing. Quote: “We’re encouraged by the momentum in our diversified businesses… WiFi 7 adoption… automotive connectivity… timing portfolio” .
Record capital return: $500M repurchases (7.4M shares) plus $111M dividends in Q2; additional 3.6M shares repurchased for $212M after quarter end under 10b5‑1. Quote: “returned over $600 million… the highest quarterly return ever” .

What Went Wrong

YoY revenue down to $953.2M from $1,046.0M and GAAP EPS decreased to $0.43 from $1.14; GAAP operating margin fell to 10.2% from 18.1% YoY, reflecting higher R&D, SG&A and restructuring charges .
Mobile declined 17% sequentially due to typical seasonality; Android contribution was flat sequentially at “on or about $70 million,” indicating limited short-term uplift before expected June bump .
Elevated restructuring and charges: GAAP operating expenses $294.3M vs $231.1M YoY; non-GAAP adjustments included $24.1M restructuring and $37.4M amortization, highlighting dependence on non-GAAP to reflect underlying profitability .

Financial Results

Metric	Q4 2024	Q1 2025	Q2 2025
Revenue ($USD Millions)	$1,024.9	$1,068.5	$953.2
GAAP Diluted EPS ($)	$0.37	$1.00	$0.43
Non-GAAP Diluted EPS ($)	$1.55	$1.60	$1.24
GAAP Gross Margin %	41.9%	41.4%	41.1%
Non-GAAP Gross Margin %	46.5%	46.5%	46.7%
GAAP Operating Margin %	5.8%	16.9%	10.2%
Non-GAAP Operating Margin %	26.7%	26.7%	23.3%

Non-GAAP adjustments Q2 FY25: GAAP diluted EPS $0.43 reconciled to non-GAAP $1.24 via share-based comp $0.40, amortization $0.24, restructuring $0.15, tax adjustments $0.02 (and other smaller items) .

Segment/KPI snapshot (Q2 FY25 only):

Metric	Q2 2025
Mobile Revenue Mix (%)	62%
Android Revenue ($USD Millions)	~$70
Broad Markets Seq Growth (%)	2%
Broad Markets YoY Growth (%)	3%

Operating cash flow and balance sheet KPIs:

Metric	Q4 2024	Q1 2025	Q2 2025
Operating Cash Flow ($USD Millions)	$476.0	$377.2	$409.5
Free Cash Flow ($USD Millions)	$393.2	$338.2	$371.0
Free Cash Flow Margin (%)	38.4%	31.7%	38.9%
Capital Expenditure ($USD Millions)	$82.8	$39.0	$38.5
Dividends Paid ($USD Millions)	$112.0	$112.5	$110.6
Share Repurchases ($USD Millions)	$1.9 (withholding)	$38.3 (withholding)	$500.0 (program)
Shares Repurchased (Millions)	—	—	7.4 (Q2); +3.6 post‑quarter ($212M)
Inventory ($USD Millions)	$784.8	$699.7	$678.3
Cash, Cash Equivalents & Mkt Securities ($USD Millions)	$1,574.1	$1,754.8	$1,527.7
Debt ($USD Millions)	$994.3	$994.7	$995.1

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue ($USD Millions)	Q3 2025	—	$920–$960	New
Non-GAAP Diluted EPS ($)	Q3 2025	—	$1.24 at midpoint	New
Gross Margin % (non-GAAP)	Q3 2025	—	46–47%	New
Operating Expenses ($USD Millions)	Q3 2025	—	$220–$230	New
Other Income ($USD Millions)	Q3 2025	—	~$5	New
Effective Tax Rate (%)	Q3 2025	—	~13%	New
Diluted Share Count (Millions)	Q3 2025	—	~152	New
Mobile Sequential Trend	Q3 2025	—	Low single-digit decline	New
Broad Markets Sequential Trend	Q3 2025	—	Growth expected	New
Dividend per Share ($)	Q2 2025	$0.70 (Q1 declared)	$0.70 declared; payable Jun 17, 2025	Maintained

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2024, Q1 2025)	Current Period (Q2 2025)	Trend
AI/Smartphone RF complexity	“AI is poised to ignite a transformative smartphone upgrade cycle… higher RF complexity” (Q4)	“AI driving uplink‑intensive workloads → higher transmit power, efficiency, uplink MIMO; tailwind for RF content”	Strengthening secular tailwind
Broad Markets momentum	Q1: demand indicators improving; sequential growth expected	5th consecutive sequential growth; +3% YoY; Wi‑Fi 7, automotive, edge IoT driving	Continuing improvement
Wi‑Fi 7 adoption	Q4: expanded design wins (Linksys, NETGEAR, TP‑Link)	“Accelerating… more RF content per system”; early Wi‑Fi 8 work underway	Expanding adoption
Automotive connectivity	Q4: increased design win momentum (5G FEMs, infotainment, isolators)	Software‑defined vehicles need robust connectivity; strong year‑over‑year growth	Structural growth
Tariffs/macro	—	Tariff impact “no major direct” in current guidance; diversified supply chain; monitoring daily	Managed risk
Capacity/CapEx	—	Sufficient capacity; CapEx mid‑single‑digit % of revenue; focus on new technology development	Investment disciplined
Largest customer/content	—	Mobile 62% of revenue; blended content unchanged; focus on delivering better parts; competitive market	Execution focus
Leadership transitions	—	CFO transition to Mark Dentinger; new SVP Sales & Marketing Todd Lepinski	Organizational refresh

Management Commentary

“Skyworks delivered solid results this quarter, underscored by our diversified product portfolio, disciplined execution, and strategic engagements with customers… returned over $600 million to shareholders through share repurchases and dividends — representing the highest quarterly return ever” — CEO Phil Brace .
“Revenue, gross margin and EPS exceeded the midpoint of our guidance… Broad Markets increased 2% sequentially and grew 3% year‑over‑year… Gross margin at 46.7%” — CFO Kris Sennesael .
“Smartphones are evolving with AI… should drive higher transmit power, better efficiency and expanded uplink MIMO — areas where Skyworks is strongly positioned” — CEO Phil Brace .
“We have plenty of capacity in place to absorb a potential large upside to the business… CapEx is running mid‑single digits as a percent of revenue” — CFO Kris Sennesael .
“Based on our current understanding of the tariff landscape, we don’t see any major direct impact on our business” — CFO Kris Sennesael .

Q&A Highlights

Tariffs: Management sees “no major direct impact” and reflected any impacts in Q3 guidance; diversified global supply chain mitigates risk .
Capacity/CapEx: Sufficient capacity across U.S., Japan, Singapore, Mexico; CapEx focused on technology development, mid‑single‑digit % of revenue .
Android: ~$70M in March quarter, flat sequentially; “sizable sequential bump” expected in June quarter .
Margins: Non‑GAAP gross margin guided 46–47% for Q3 due to favorable mix, even as mobile declines sequentially .
Largest customer/content: Blended content unchanged near‑term; execution emphasis on “delivering better parts” in a competitive landscape .

Estimates Context

We attempted to retrieve Wall Street consensus (S&P Global) for Q1–Q3 FY25 and near-term quarters; consensus data was unavailable for SWKS for these periods, so we cannot quantify beat/miss versus SPGI consensus. Values retrieved from S&P Global were unavailable for the requested periods.
In lieu of estimates, management stated Q2 results exceeded the midpoint of internal guidance and set Q3 guidance at revenue $920–$960M and non‑GAAP EPS $1.24 at midpoint, with 46–47% non‑GAAP gross margin .

Key Takeaways for Investors

Non-GAAP profitability resilient: 46.7% gross margin and 23.3% operating margin despite seasonal mobile softness; free cash flow robust at $371M (39%) .
Mix shift supports margins: Broad Markets up sequentially and YoY, offsetting mobile decline; mix and execution underpin Q3 margin guide (46–47%) .
Capital allocation aggressive: $500M buybacks plus $111M dividends in Q2; additional $212M buybacks post-quarter; dividend sustained at $0.70/share .
Strategic tailwinds: AI-driven smartphone workloads, accelerating Wi‑Fi 7, and software-defined vehicles should expand RF content opportunities over multi-year horizon .
Leadership changes: New CFO and SVP Sales & Marketing could sharpen execution and investor focus on operational efficiency and diversified growth .
Near-term trading setup: Q3 guide implies stable EPS at $1.24 midpoint with margin resilience and Broad Markets strength; watch Android June uplift and tariff headlines (management sees limited impact) .
Focus points: Track gross margin durability vs mix; inventory reductions (9th consecutive quarter per commentary) and capacity utilization improvements to support margins; monitor largest customer content trajectory through upcoming launches .