Qorvo (QRVO) Q1 2025 earnings summary

Executive summary

• Revenue for Q1 FY2025 was $887 million, up 36% year-over-year, driven by content gains at the largest customer and higher Android shipments, surpassing guidance midpoint by $37 million.

• Non-GAAP gross margin was 40.9% (high end of guidance); GAAP gross margin was 37.5%, reflecting improved factory utilization and lower restructuring charges.

• Non-GAAP diluted EPS was $0.87, above guidance; GAAP diluted EPS was $0.00, with a return to operating profitability.

• Integrated Anokiwave and completed transition of Beijing and Dezhou operations to Luxshare, including divestiture of China assembly and test operations.

• Key end markets include automotive, consumer, defense and aerospace, industrial and enterprise, infrastructure, and mobile, supported by electrification, connectivity, and AI trends.

Financial highlights

• Q1 FY2025 revenue: $887 million, up from $651.2 million year-over-year.

• Non-GAAP net income was $83.5 million; GAAP net income was $0.4 million, reversing a prior year loss.

• Free cash flow was $43 million after $38 million in capital expenditures.

• Ended the quarter with $1.1 billion in cash and equivalents, $1.5 billion in long-term debt, and repurchased $125 million in stock at $101 per share.

• Net cash from operating activities was $81.1 million, up from $44.9 million year-over-year.

Outlook and guidance

• Q2 FY2025 revenue expected at $1.025 billion ±$25 million, non-GAAP gross margin between 46%-47%, and non-GAAP diluted EPS between $1.75 and $1.95.

• Gross margin for Q1 is expected to be the low point for FY2025, with improvement driven by product mix, factory utilization, and productivity initiatives.

• Non-GAAP operating expenses projected at $275 million for Q2, with $10 million related to digital transformation.

• Non-GAAP tax rate for FY2025 expected to be 10%-12%, with a gradual increase due to tax legislation changes.