Qorvo® (Nasdaq:QRVO), a leading global provider of connectivity and
power solutions, today announced financial results for the
Company’s fiscal 2024 second quarter ended September 30, 2023.
Quarterly Highlights
- Grew quarterly revenue 70% sequentially and exceeded the
mid-point of revenue guidance by $103 million
- Achieved sequential growth in ACG, CSG and HPA operating
segments
- Secured broad-based design wins in all end markets, including
major UWB wins in a flagship Android smartphone and an in-vehicle
car access platform by a leading German automotive tier one
- Significantly reduced Qorvo inventory while improving Android
channel inventory
On a GAAP basis, revenue for Qorvo’s fiscal 2024 second quarter
was $1.103 billion, gross margin was 44.4%, operating income was
$151 million and diluted earnings per share was $0.99. On a
non-GAAP basis, gross margin was 47.6%, operating income was $279
million and diluted earnings per share was $2.39.
Bob Bruggeworth, president and chief executive officer of Qorvo,
said, “Qorvo delivered significantly improved financial performance
in the September quarter supported by content gains at our largest
customer. Each of our operating segments is enjoying multiyear
technology upgrade cycles that improve performance and enhance
functionality, and Qorvo is critical to enabling these
capabilities. The Qorvo team continues to operate very well to
secure new customer designs and broaden our opportunities in growth
markets.”
Financial Commentary and Outlook
Grant Brown, chief financial officer of Qorvo, said, “Qorvo
exceeded the high end of our September quarterly guidance for
revenue, gross margin and EPS, reflecting content gains at our
largest customer and sequential growth in all three operating
segments. Looking forward, our December quarterly guidance reflects
seasonal patterns, robust content on customer programs and improved
channel inventories. We continue to expect year-over-year revenue
growth in fiscal 2024.”
Qorvo’s current outlook for the December 2023 quarter is:
- Quarterly revenue of approximately $1 billion, plus or minus
$25 million
- Non-GAAP gross margin between 43% and 44%
- Non-GAAP diluted earnings per share of approximately $1.65 at
the midpoint of revenue
See “Forward-looking non-GAAP financial measures” below. Qorvo’s
actual quarterly results may differ from these expectations and
projections, and such differences may be material.
Selected Financial Information
The following tables set forth selected GAAP and non-GAAP
financial information for Qorvo for the periods indicated. See the
more detailed financial information for Qorvo, including
reconciliations of GAAP and non-GAAP financial information,
attached.
SELECTED GAAP RESULTS |
(Unaudited) |
(In millions, except for percentages and EPS) |
|
|
Q2 Fiscal 2024 |
|
Q1 Fiscal 2024 |
|
Q2 Fiscal 2023 |
|
Sequential Change |
|
|
|
Year-over-Year Change |
|
Revenue |
$ |
1,103.5 |
|
$ |
651.2 |
|
$ |
1,158.1 |
|
$ |
452.3 |
|
|
$ |
(54.6 |
) |
|
Gross profit |
$ |
489.7 |
|
$ |
229.1 |
|
$ |
538.9 |
|
$ |
260.6 |
|
|
$ |
(49.2 |
) |
|
Gross margin |
|
44.4 |
% |
|
35.2 |
% |
|
46.5 |
% |
|
9.2 |
|
ppt |
|
(2.1 |
) |
ppt |
Operating expenses |
$ |
338.3 |
|
$ |
277.2 |
|
$ |
277.4 |
|
$ |
61.1 |
|
|
$ |
60.9 |
|
|
Operating income (loss) |
$ |
151.4 |
|
$ |
(48.1 |
) |
$ |
261.6 |
|
$ |
199.5 |
|
|
$ |
(110.2 |
) |
|
Net income (loss) |
$ |
97.5 |
|
$ |
(43.6 |
) |
$ |
188.6 |
|
$ |
141.1 |
|
|
$ |
(91.1 |
) |
|
Weighted-average diluted
shares |
|
98.6 |
|
|
98.5 |
|
|
103.7 |
|
|
0.1 |
|
|
|
(5.1 |
) |
|
Diluted EPS |
$ |
0.99 |
|
$ |
(0.44 |
) |
$ |
1.82 |
|
$ |
1.43 |
|
|
$ |
(0.83 |
) |
|
SELECTED NON-GAAP RESULTS1 |
(Unaudited) |
(In millions, except for percentages and EPS) |
|
|
Q2 Fiscal 2024 |
|
Q1 Fiscal 2024 |
|
Q2 Fiscal 2023 |
|
Sequential Change |
|
|
Year-over-Year Change |
|
Revenue |
$ |
1,103.5 |
|
$ |
651.2 |
|
$ |
1,158.1 |
|
$ |
452.3 |
|
|
$ |
(54.6 |
) |
|
Gross profit |
$ |
525.2 |
|
$ |
279.5 |
|
$ |
570.2 |
|
$ |
245.7 |
|
|
$ |
(45.0 |
) |
|
Gross margin |
|
47.6 |
% |
|
42.9 |
% |
|
49.2 |
% |
|
4.7 |
|
ppt |
|
(1.6 |
) |
ppt |
Operating expenses |
$ |
245.8 |
|
$ |
232.7 |
|
$ |
232.5 |
|
$ |
13.1 |
|
|
$ |
13.3 |
|
|
Operating income |
$ |
279.4 |
|
$ |
46.7 |
|
$ |
337.7 |
|
$ |
232.7 |
|
|
$ |
(58.3 |
) |
|
Net income |
$ |
235.5 |
|
$ |
33.6 |
|
$ |
276.2 |
|
$ |
201.9 |
|
|
$ |
(40.7 |
) |
|
Weighted-average diluted
shares |
|
98.6 |
|
|
99.3 |
|
|
103.7 |
|
|
(0.7 |
) |
|
|
(5.1 |
) |
|
Diluted EPS |
$ |
2.39 |
|
$ |
0.34 |
|
$ |
2.66 |
|
$ |
2.05 |
|
|
$ |
(0.27 |
) |
|
1 Adjusted for stock-based compensation expense, amortization of
intangible assets, restructuring related charges, acquisition and
integration related costs, goodwill and other asset impairments,
other expenses (income), loss (gain) on investments, and an
adjustment of income taxes.
SELECTED GAAP RESULTS BY OPERATING SEGMENT |
(In millions, except percentages) |
(Unaudited) |
|
|
Q2 Fiscal 2024 |
|
Q1 Fiscal 2024 |
|
Q2 Fiscal 2023 |
|
Sequential Change |
|
Year-over-Year Change |
Revenue |
|
|
|
|
|
|
|
|
|
HPA |
$ |
149.8 |
|
|
$ |
139.7 |
|
|
$ |
228.1 |
|
|
|
7.2 |
% |
|
|
(34.3 |
)% |
CSG |
|
103.6 |
|
|
|
99.3 |
|
|
|
143.4 |
|
|
|
4.3 |
% |
|
|
(27.8 |
)% |
ACG |
|
850.1 |
|
|
|
412.2 |
|
|
|
786.6 |
|
|
|
106.2 |
% |
|
|
8.1 |
% |
Total revenue |
$ |
1,103.5 |
|
|
$ |
651.2 |
|
|
$ |
1,158.1 |
|
|
|
69.5 |
% |
|
|
(4.7 |
)% |
Operating income (loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
HPA |
$ |
25.4 |
|
|
$ |
24.0 |
|
|
$ |
80.5 |
|
|
|
5.8 |
% |
|
|
(68.4 |
)% |
CSG |
|
(27.7 |
) |
|
|
(20.2 |
) |
|
|
(10.0 |
) |
|
|
(37.1 |
)% |
|
|
(177.0 |
)% |
ACG |
|
284.8 |
|
|
|
45.0 |
|
|
|
267.2 |
|
|
|
532.9 |
% |
|
|
6.6 |
% |
All other1 |
|
(131.1 |
) |
|
|
(96.9 |
) |
|
|
(76.1 |
) |
|
|
(35.3 |
)% |
|
|
(72.3 |
)% |
Total operating income
(loss) |
$ |
151.4 |
|
|
$ |
(48.1 |
) |
|
$ |
261.6 |
|
|
|
414.8 |
% |
|
|
(42.1 |
)% |
Operating income (loss) as a %
of revenue |
|
|
|
|
|
|
|
|
|
|
|
HPA |
|
17.0 |
% |
|
|
17.2 |
% |
|
|
35.3 |
% |
|
|
(0.2 |
)% |
|
|
(18.3 |
)% |
CSG |
|
(26.7 |
) |
|
|
(20.3 |
) |
|
|
(7.0 |
) |
|
|
(6.4 |
)% |
|
|
(19.7 |
)% |
ACG |
|
33.5 |
|
|
|
10.9 |
|
|
|
34.0 |
|
|
|
22.6 |
% |
|
|
(0.5 |
)% |
Total operating income (loss)
as a % of revenue |
|
13.7 |
% |
|
|
(7.4 |
)% |
|
|
22.6 |
% |
|
|
21.1 |
% |
|
|
(8.9 |
)% |
1 Includes stock-based compensation expense, amortization of
intangible assets, restructuring related charges, acquisition and
integration related costs, goodwill and other asset impairments,
other expenses (income), and other miscellaneous corporate overhead
expenses.
Non-GAAP Financial Measures
In addition to disclosing financial results calculated in
accordance with United States (U.S.) generally accepted accounting
principles (GAAP), this earnings release contains some or all of
the following non-GAAP financial measures: (i) non-GAAP gross
profit and gross margin, (ii) non-GAAP operating expenses,
operating income and operating margin, (iii) non-GAAP net income,
(iv) non-GAAP net income per diluted share, (v) free cash flow,
(vi) EBITDA, (vii) non-GAAP return on invested capital (ROIC), and
(viii) net debt or positive net cash. Each of these non-GAAP
financial measures is either adjusted from GAAP results to exclude
certain expenses or derived from multiple GAAP measures, which are
outlined in the “Reconciliation of GAAP to Non-GAAP Financial
Measures” tables, attached, and the “Additional Selected Non-GAAP
Financial Measures and Reconciliations” tables, attached.
In managing Qorvo's business on a consolidated basis, management
develops an annual operating plan, which is approved by our Board
of Directors, using non-GAAP financial measures. In developing and
monitoring performance against this plan, management considers the
actual or potential impacts on these non-GAAP financial measures
from actions taken to reduce costs with the goal of increasing
gross margin and operating margin. In addition, management relies
upon these non-GAAP financial measures to assess whether research
and development efforts are at an appropriate level, and when
making decisions about product spending, administrative budgets,
and other operating expenses. Also, we believe that non-GAAP
financial measures provide useful supplemental information to
investors and enable investors to analyze the results of operations
in the same way as management. We have chosen to provide this
supplemental information to enable investors to perform additional
comparisons of our operating results, to assess our liquidity and
capital position and to analyze financial performance excluding the
effect of expenses unrelated to operations, and stock-based
compensation expense, which may obscure trends in Qorvo's
underlying performance.
We believe that these non-GAAP financial measures offer an
additional view of Qorvo's operations that, when coupled with the
GAAP results and the reconciliations to corresponding GAAP
financial measures, provide a more complete understanding of
Qorvo's results of operations and the factors and trends affecting
Qorvo's business. However, these non-GAAP financial measures should
be considered as a supplement to, and not as a substitute for, or
superior to, the corresponding measures calculated in accordance
with GAAP.
Our rationale for using these non-GAAP financial measures, as
well as their impact on the presentation of Qorvo's operations, are
outlined below:
Non-GAAP gross profit and gross margin. Non-GAAP gross profit
and gross margin exclude amortization of intangible assets,
stock-based compensation expense, restructuring related charges and
acquisition and integration related costs. We believe that
exclusion of these costs in presenting non-GAAP gross profit and
gross margin facilitates a useful evaluation of our historical
performance and projected costs and the potential for realizing
cost efficiencies.
We view amortization of acquisition-related intangible assets,
such as the amortization of the cost associated with an acquired
company’s research and development efforts, trade names, and
customer relationships, as items arising from pre-acquisition
activities, determined at the time of an acquisition, rather than
ongoing costs of operating Qorvo’s business. While these intangible
assets are continually evaluated for impairment, amortization of
the cost of purchased intangible assets is a static expense, which
is not typically affected by operations during any particular
period. Although we exclude the amortization of purchased
intangible assets from these non-GAAP financial measures,
management believes that it is important for investors to
understand that such intangible assets were recorded as part of
purchase price accounting and contribute to revenue generation.
We believe that presentation of non-GAAP gross profit and gross
margin and other non-GAAP financial measures that exclude the
impact of stock-based compensation expense assists management and
investors in evaluating the period-over-period performance of
Qorvo's ongoing operations because (i) the expenses are non-cash in
nature, and (ii) although the size of the grants is within our
control, the amount of expense varies depending on factors such as
short-term fluctuations in stock price volatility and prevailing
interest rates, which can be unrelated to the operational
performance of Qorvo during the period in which the expense is
incurred and generally are outside the control of management.
Moreover, we believe that the exclusion of stock-based compensation
expense in presenting non-GAAP gross profit and gross margin and
other non-GAAP financial measures is useful to investors to
understand the impact of the expensing of stock-based compensation
to Qorvo's gross profit and gross margins and other financial
measures in comparison to prior periods. We also believe that the
adjustments to profit and margin related to restructuring related
charges and acquisition and integration related costs do not
constitute part of Qorvo's ongoing operations and therefore the
exclusion of these items provides management and investors with
better visibility into the actual revenue and actual costs required
to generate revenues over time and facilitates a useful evaluation
of our historical and projected performance. We believe disclosure
of non-GAAP gross profit and gross margin has economic substance
because the excluded expenses do not represent continuing cash
expenditures and, as described above, we have little control over
the timing and amount of the expenses in question.
Non-GAAP operating expenses, operating income and operating
margin. Non-GAAP operating expenses, operating income and operating
margin exclude stock-based compensation expense, amortization of
intangible assets, acquisition and integration related costs, gain
or loss on assets, goodwill and other asset impairments,
restructuring related charges, and certain other expenses (income).
We believe that presentation of a measure of operating expenses,
operating income and operating margin that excludes amortization of
intangible assets and stock-based compensation expense is useful to
both management and investors for the same reasons as described
above with respect to our use of non-GAAP gross profit and gross
margin. We believe that acquisition and integration related costs,
gain or loss on assets, goodwill and other asset impairments,
restructuring related charges, and certain other expenses (income)
do not constitute part of Qorvo's ongoing operations and therefore,
the exclusion of these costs provides management and investors with
better visibility into the actual costs required to generate
revenues over time and facilitates a useful evaluation of our
historical and projected performance. We believe disclosure of
non-GAAP operating expenses, operating income and operating margin
has economic substance because the excluded expenses are either
unrelated to ongoing operations or do not represent current cash
expenditures.
Non-GAAP net income and non-GAAP net income per diluted share.
Non-GAAP net income and non-GAAP net income per diluted share
exclude the effects of stock-based compensation expense,
amortization of intangible assets, acquisition and integration
related costs, gain or loss on assets, goodwill and other asset
impairments, restructuring related charges, certain other expenses
(income), gain or loss on investments, and also reflect an
adjustment of income taxes. The income tax adjustment primarily
represents the use of research and development tax credit
carryforwards, deferred tax expense (benefit) items not affecting
taxes payable, adjustments related to the deemed and actual
repatriation of historical foreign earnings, non-cash expense
(benefit) related to uncertain tax positions and other items
unrelated to the current fiscal year or that are not indicative of
our ongoing business operations. We believe that presentation of
measures of net income and net income per diluted share that
exclude these items is useful to both management and investors for
the reasons described above with respect to non-GAAP gross profit
and gross margin and non-GAAP operating expenses, operating income
and operating margin. We believe disclosure of non-GAAP net income
and non-GAAP net income per diluted share has economic substance
because the excluded expenses are either unrelated to ongoing
operations or do not represent current cash expenditures.
Free cash flow. Qorvo defines free cash flow as net cash
provided by operating activities during the period minus property
and equipment expenditures made during the period, and free cash
flow margin is calculated as free cash flow as a percentage of
revenue. We use free cash flow as a supplemental financial measure
in our evaluation of liquidity and financial strength. Management
believes that this measure is useful as an indicator of our ability
to service our debt, meet other payment obligations and make
strategic investments. Free cash flow should be considered in
addition to, rather than as a substitute for, net income as a
measure of our performance and net cash provided by operating
activities as a measure of our liquidity. Additionally, our
definition of free cash flow is limited, in that it does not
represent residual cash flows available for discretionary
expenditures due to the fact that the measure does not deduct the
payments required for debt service and other contractual
obligations. Therefore, we believe it is important to view free
cash flow as a measure that provides supplemental information to
our entire statement of cash flows.
EBITDA. Qorvo adjusts GAAP net income for interest expense,
interest income, income tax expense (benefit), depreciation and
intangible amortization expense, stock-based compensation and other
charges that are not representative of Qorvo's ongoing operations
(including goodwill and other asset impairments, investment
activity, acquisition-related costs and restructuring-related
costs) when presenting EBITDA. Management believes that this
measure is useful to evaluate our ongoing operations and as a
general indicator of our operating cash flow (in conjunction with a
cash flow statement which also includes among other items, changes
in working capital and the effect of non-cash charges).
Non-GAAP ROIC. Return on invested capital (ROIC) is a non-GAAP
financial measure that management believes provides useful
supplemental information for management and the investor by
measuring the effectiveness of our operations' use of invested
capital to generate profits. We use ROIC to track how much value we
are creating for our shareholders. Non-GAAP ROIC is calculated by
dividing annualized non-GAAP operating income, net of an adjustment
for income taxes (as described above), by average invested capital.
Average invested capital is calculated by subtracting the average
of the beginning balance and the ending balance of equity plus net
debt, less certain goodwill.
Net debt or positive net cash. Net debt or positive net cash is
defined as unrestricted cash, cash equivalents and short-term
investments minus any borrowings under our credit facility and the
principal balance of our senior unsecured notes. Management
believes that net debt or positive net cash provides useful
information regarding the level of Qorvo's indebtedness by
reflecting cash and investments that could be used to repay
debt.
Inventory days on hand. Inventory days on hand is defined as (a)
average net inventory for the period, divided by (b) the result of
non-GAAP cost of goods sold for the period divided by the number of
days in the period.
Forward-looking non-GAAP financial measures. Our earnings
release contains forward-looking free cash flow, gross margin,
income tax rate and diluted earnings per share. We provide these
non-GAAP measures to investors on a prospective basis for the same
reasons (set forth above) that we provide them to investors on a
historical basis. We are unable to provide a reconciliation of the
forward-looking non-GAAP financial measures to the most directly
comparable forward-looking GAAP financial measures without
unreasonable effort due to variability and difficulty in making
accurate projections for items that would be required to be
included in the GAAP measures, such as stock-based compensation,
acquisition and integration related costs, restructuring related
charges, gain or loss on assets, goodwill and other asset
impairments, gain or loss on investments and the provision for
income taxes, which could have a potentially significant impact on
our future GAAP results.
Limitations of non-GAAP financial measures. The primary material
limitations associated with the use of non-GAAP financial measures
as an analytical tool compared to the most directly comparable GAAP
financial measures are these non-GAAP financial measures (i) may
not be comparable to similarly titled measures used by other
companies in our industry, and (ii) exclude financial information
that some may consider important in evaluating our performance,
thus limiting their usefulness as a comparative tool. We compensate
for these limitations by providing full disclosure of the
differences between these non-GAAP financial measures and the
corresponding GAAP financial measures, including a reconciliation
of the non-GAAP financial measures to the corresponding GAAP
financial measures, to enable investors to perform their own
analysis of our gross profit and gross margin, operating expenses,
operating income, net income, net income per diluted share and net
cash provided by operating activities. We further compensate for
the limitations of our use of non-GAAP financial measures by
presenting the corresponding GAAP measures more prominently.
Qorvo will conduct a conference call at 5:00 p.m. ET today to
discuss today’s press release. The conference call will be
broadcast live over the Internet and can be accessed by any
interested party at the following URL: https://ir.qorvo.com (under
“Events & Presentations”). A telephone playback of the
conference call will be available approximately two hours after the
call’s completion and can be accessed by dialing 1-412-317-0088 and
using the passcode 8451381. The playback will be available through
the close of business November 8, 2023.
About Qorvo
Qorvo (Nasdaq:QRVO) supplies innovative semiconductor solutions
that make a better world possible. We combine product and
technology leadership, systems-level expertise and global
manufacturing scale to quickly solve our customers’ most complex
technical challenges. Qorvo serves diverse high-growth segments of
large global markets, including consumer electronics, smart
home/IoT, automotive, EVs, battery-powered appliances, network
infrastructure, and aerospace/defense. Visit www.qorvo.com to learn
how our diverse and innovative team is helping connect, protect and
power our planet.
Qorvo is a registered trademark of Qorvo, Inc. in the U.S. and
in other countries. All other trademarks are the property of their
respective owners.
This press release includes "forward-looking statements" within
the meaning of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements
include, but are not limited to, statements about our plans,
objectives, representations and contentions, and are not historical
facts and typically are identified by terms such as "may," "will,"
"should," "could," "expect," "plan," "anticipate," "believe,"
"estimate," "forecast", "predict," "potential," "continue" and
similar words, although some forward-looking statements are
expressed differently. You should be aware that the forward-looking
statements included herein represent management's current judgment
and expectations, but our actual results, events and performance
could differ materially from those expressed or implied by
forward-looking statements. We do not intend to update any of these
forward-looking statements or publicly announce the results of any
revisions to these forward-looking statements, other than as is
required under U.S. federal securities laws. Our business is
subject to numerous risks and uncertainties, including those
relating to fluctuations in our operating results on a quarterly
and annual basis; our substantial dependence on developing new
products and achieving design wins; our dependence on several large
customers for a substantial portion of our revenue; a loss of
revenue if defense and aerospace contracts are canceled or delayed;
continued effects of the COVID-19 pandemic; our dependence on third
parties; risks related to sales through distributors; risks
associated with the operation of our manufacturing facilities;
business disruptions; poor manufacturing yields; increased
inventory risks and costs, including under long-term supply
agreements, due to timing of customers' forecasts; our inability to
effectively manage or maintain evolving relationships with chipset
suppliers; our ability to continue to innovate in a very
competitive industry; underutilization of manufacturing facilities;
unfavorable changes in interest rates, pricing of certain precious
metals, utility rates and foreign currency exchange rates; our
acquisitions and other strategic investments failing to achieve
financial or strategic objectives; our ability to attract, retain
and motivate key employees; warranty claims, product recalls and
product liability; changes in our effective tax rate; enactment of
international or domestic tax legislation, or changes in regulatory
guidance; changes in the favorable tax status of certain of our
subsidiaries; risks associated with environmental, health and
safety regulations, and climate change; risks from international
sales and operations; economic regulation in China; changes in
government trade policies, including imposition of tariffs and
export restrictions; we may not be able to generate sufficient cash
to service all of our debt; restrictions imposed by the agreements
governing our debt; our reliance on our intellectual property
portfolio; claims of infringement of third-party intellectual
property rights; security breaches and other similar disruptions;
theft, loss or misuse of personal data by or about our employees,
customers or third parties; provisions in our governing documents
and Delaware law may discourage takeovers and business combinations
that our stockholders might consider to be in their best interests;
and volatility in the price of our common stock. These and other
risks and uncertainties, which are described in more detail under
“Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K
for the fiscal year ended April 1, 2023, and Qorvo’s subsequent
reports and statements that we file with the SEC, could cause
actual results and developments to be materially different from
those expressed or implied by any of these forward-looking
statements.
Financial Tables to Follow
QORVO, INC. AND SUBSIDIARIESCONDENSED
CONSOLIDATED STATEMENTS OF INCOME(In thousands, except per
share data)(Unaudited) |
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
September 30, 2023 |
|
October 1, 2022 |
|
September 30, 2023 |
|
October 1, 2022 |
Revenue |
$ |
1,103,493 |
|
|
$ |
1,158,057 |
|
|
$ |
1,754,657 |
|
|
$ |
2,193,415 |
|
|
|
|
|
|
|
|
|
Costs and expenses: |
|
|
|
|
|
|
|
Cost of goods sold |
|
613,803 |
|
|
|
619,130 |
|
|
|
1,035,897 |
|
|
|
1,279,238 |
|
Research and development |
|
174,947 |
|
|
|
168,164 |
|
|
|
338,037 |
|
|
|
336,732 |
|
Selling, general and administrative |
|
103,696 |
|
|
|
97,752 |
|
|
|
209,119 |
|
|
|
199,567 |
|
Other operating expense |
|
59,619 |
|
|
|
11,449 |
|
|
|
68,312 |
|
|
|
14,457 |
|
Total costs and expenses |
|
952,065 |
|
|
|
896,495 |
|
|
|
1,651,365 |
|
|
|
1,829,994 |
|
|
|
|
|
|
|
|
|
Operating income |
|
151,428 |
|
|
|
261,562 |
|
|
|
103,292 |
|
|
|
363,421 |
|
Interest expense |
|
(17,121 |
) |
|
|
(16,904 |
) |
|
|
(34,382 |
) |
|
|
(34,156 |
) |
Other income (expense),
net |
|
5,211 |
|
|
|
2,214 |
|
|
|
18,927 |
|
|
|
(2,848 |
) |
|
|
|
|
|
|
|
|
Income before income taxes |
|
139,518 |
|
|
|
246,872 |
|
|
|
87,837 |
|
|
|
326,417 |
|
Income tax expense |
|
(42,057 |
) |
|
|
(58,257 |
) |
|
|
(33,956 |
) |
|
|
(68,918 |
) |
Net income |
$ |
97,461 |
|
|
$ |
188,615 |
|
|
$ |
53,881 |
|
|
$ |
257,499 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share,
diluted |
$ |
0.99 |
|
|
$ |
1.82 |
|
|
$ |
0.54 |
|
|
$ |
2.46 |
|
|
|
|
|
|
|
|
|
Weighted-average outstanding
diluted shares |
|
98,590 |
|
|
|
103,674 |
|
|
|
98,892 |
|
|
|
104,817 |
|
QORVO, INC. AND SUBSIDIARIESRECONCILIATION
OF GAAP TO NON-GAAP FINANCIAL MEASURES(In thousands,
except per share data)(Unaudited) |
|
|
Three Months Ended |
|
September 30, 2023 |
|
July 1, 2023 |
|
October 1, 2022 |
|
|
|
|
|
|
GAAP operating income (loss) |
$ |
151,428 |
|
|
$ |
(48,136 |
) |
|
$ |
261,562 |
|
Stock-based compensation expense |
|
39,053 |
|
|
|
38,445 |
|
|
|
31,789 |
|
Amortization of intangible assets |
|
29,963 |
|
|
|
30,872 |
|
|
|
32,787 |
|
Restructuring related charges |
|
8,418 |
|
|
|
22,736 |
|
|
|
4,544 |
|
Acquisition and integration related costs |
|
852 |
|
|
|
1,195 |
|
|
|
8,642 |
|
Goodwill impairment |
|
48,000 |
|
|
|
— |
|
|
|
— |
|
Other expenses (income) |
|
1,712 |
|
|
|
1,609 |
|
|
|
(1,627 |
) |
Non-GAAP operating income |
$ |
279,426 |
|
|
$ |
46,721 |
|
|
$ |
337,697 |
|
|
|
|
|
|
|
GAAP net income (loss) |
$ |
97,461 |
|
|
$ |
(43,580 |
) |
|
$ |
188,615 |
|
Stock-based compensation expense |
|
39,053 |
|
|
|
38,445 |
|
|
|
31,789 |
|
Amortization of intangible assets |
|
29,963 |
|
|
|
30,872 |
|
|
|
32,787 |
|
Restructuring related charges |
|
8,418 |
|
|
|
22,736 |
|
|
|
4,544 |
|
Acquisition and integration related costs |
|
852 |
|
|
|
1,195 |
|
|
|
8,642 |
|
Goodwill impairment |
|
48,000 |
|
|
|
— |
|
|
|
— |
|
Other expenses (income) |
|
2,616 |
|
|
|
(914 |
) |
|
|
2 |
|
Loss (gain) on investments |
|
1,574 |
|
|
|
(2,062 |
) |
|
|
(967 |
) |
Adjustment of income taxes |
|
7,576 |
|
|
|
(13,114 |
) |
|
|
10,814 |
|
Non-GAAP net income |
$ |
235,513 |
|
|
$ |
33,578 |
|
|
$ |
276,226 |
|
|
|
|
|
|
|
GAAP weighted-average
outstanding diluted shares |
|
98,590 |
|
|
|
98,509 |
|
|
|
103,674 |
|
Dilutive stock-based awards |
|
— |
|
|
|
806 |
|
|
|
— |
|
Non-GAAP weighted-average
outstanding diluted shares |
|
98,590 |
|
|
|
99,315 |
|
|
|
103,674 |
|
|
|
|
|
|
|
Non-GAAP net income per share,
diluted |
$ |
2.39 |
|
|
$ |
0.34 |
|
|
$ |
2.66 |
|
|
|
|
|
|
|
QORVO, INC. AND SUBSIDIARIESRECONCILIATION
OF GAAP TO NON-GAAP FINANCIAL MEASURES(Unaudited) |
|
|
Three Months Ended |
(in thousands, except
percentages) |
September 30, 2023 |
|
July 1, 2023 |
|
October 1, 2022 |
GAAP gross profit/margin |
$ |
489,690 |
|
|
|
44.4 |
% |
|
$ |
229,070 |
|
|
|
35.2 |
% |
|
$ |
538,927 |
|
|
|
46.5 |
% |
Amortization of intangible assets |
|
25,591 |
|
|
|
2.3 |
|
|
|
26,489 |
|
|
|
4.1 |
|
|
|
27,574 |
|
|
|
2.4 |
|
Stock-based compensation expense |
|
7,481 |
|
|
|
0.7 |
|
|
|
4,949 |
|
|
|
0.7 |
|
|
|
3,704 |
|
|
|
0.3 |
|
Restructuring related charges |
|
2,482 |
|
|
|
0.2 |
|
|
|
18,955 |
|
|
|
2.9 |
|
|
|
— |
|
|
|
— |
|
Acquisition and integration related costs |
|
1 |
|
|
|
— |
|
|
|
1 |
|
|
|
— |
|
|
|
35 |
|
|
|
— |
|
Non-GAAP gross
profit/margin |
$ |
525,245 |
|
|
|
47.6 |
% |
|
$ |
279,464 |
|
|
|
42.9 |
% |
|
$ |
570,240 |
|
|
|
49.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
Non-GAAP Operating Income |
September 30, 2023 |
(as a percentage of sales) |
|
|
|
GAAP operating income |
|
13.7 |
% |
Stock-based compensation expense |
|
3.5 |
|
Amortization of intangible assets |
|
2.7 |
|
Restructuring related charges |
|
0.8 |
|
Goodwill impairment |
|
4.3 |
|
Acquisition and integration related costs |
|
0.1 |
|
Other expenses |
|
0.2 |
|
Non-GAAP operating income |
|
25.3 |
% |
|
|
Three Months Ended |
Free Cash Flow(1) |
September 30, 2023 |
(in millions) |
|
|
|
Net cash provided by operating activities |
$ |
93.0 |
|
Purchases of property and
equipment |
|
(28.6 |
) |
Free cash flow |
$ |
64.4 |
|
(1) Free Cash Flow is calculated as net cash provided by
operating activities minus property and equipment expenditures.
QORVO, INC. AND SUBSIDIARIESADDITIONAL
SELECTED NON-GAAP FINANCIAL MEASURES AND
RECONCILIATIONS(In thousands)(Unaudited) |
|
|
Three Months Ended |
|
September 30, 2023 |
|
July 1, 2023 |
|
October 1, 2022 |
GAAP research and development expense |
$ |
174,947 |
|
|
$ |
163,090 |
|
|
$ |
168,164 |
|
Less: |
|
|
|
|
|
Stock-based compensation expense |
|
11,519 |
|
|
|
10,356 |
|
|
|
10,445 |
|
Acquisition and integration related costs |
|
2 |
|
|
|
1 |
|
|
|
58 |
|
Non-GAAP research and
development expense |
$ |
163,426 |
|
|
$ |
152,733 |
|
|
$ |
157,661 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
September 30, 2023 |
|
July 1, 2023 |
|
October 1, 2022 |
GAAP selling, general and
administrative expense |
$ |
103,696 |
|
|
$ |
105,423 |
|
|
$ |
97,752 |
|
Less: |
|
|
|
|
|
Stock-based compensation expense |
|
20,030 |
|
|
|
23,110 |
|
|
|
17,640 |
|
Amortization of intangible assets |
|
4,372 |
|
|
|
4,383 |
|
|
|
5,213 |
|
Acquisition and integration related costs |
|
— |
|
|
|
— |
|
|
|
17 |
|
Non-GAAP selling, general and
administrative expense |
$ |
79,294 |
|
|
$ |
77,930 |
|
|
$ |
74,882 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
September 30, 2023 |
|
July 1, 2023 |
|
October 1, 2022 |
GAAP other operating
expense |
$ |
59,619 |
|
|
$ |
8,693 |
|
|
$ |
11,449 |
|
Less: |
|
|
|
|
|
Stock-based compensation expense |
|
23 |
|
|
|
30 |
|
|
|
— |
|
Restructuring related charges |
|
5,936 |
|
|
|
3,781 |
|
|
|
4,544 |
|
Acquisition and integration related costs |
|
849 |
|
|
|
1,193 |
|
|
|
8,532 |
|
Goodwill impairment |
|
48,000 |
|
|
|
— |
|
|
|
— |
|
Other expenses (income) |
|
1,712 |
|
|
|
1,609 |
|
|
|
(1,627 |
) |
Non-GAAP other operating
expense |
$ |
3,099 |
|
|
$ |
2,080 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
September 30, 2023 |
|
July 1, 2023 |
|
October 1, 2022 |
GAAP total operating
expense |
$ |
338,262 |
|
|
$ |
277,206 |
|
|
$ |
277,365 |
|
Less: |
|
|
|
|
|
Stock-based compensation expense |
|
31,572 |
|
|
|
33,496 |
|
|
|
28,085 |
|
Amortization of intangible assets |
|
4,372 |
|
|
|
4,383 |
|
|
|
5,213 |
|
Restructuring related charges |
|
5,936 |
|
|
|
3,781 |
|
|
|
4,544 |
|
Acquisition and integration related costs |
|
851 |
|
|
|
1,194 |
|
|
|
8,607 |
|
Goodwill impairment |
|
48,000 |
|
|
|
— |
|
|
|
— |
|
Other expenses (income) |
|
1,712 |
|
|
|
1,609 |
|
|
|
(1,627 |
) |
Non-GAAP total operating
expense |
$ |
245,819 |
|
|
$ |
232,743 |
|
|
$ |
232,543 |
|
QORVO, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED
BALANCE SHEETS(In thousands)(Unaudited) |
|
September 30, 2023 |
|
April 1, 2023 |
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
706,836 |
|
|
$ |
808,757 |
|
Accounts receivable, net |
|
592,738 |
|
|
|
304,519 |
|
Inventories |
|
839,855 |
|
|
|
796,596 |
|
Other current assets |
|
123,448 |
|
|
|
119,922 |
|
Total current assets |
|
2,262,877 |
|
|
|
2,029,794 |
|
|
|
|
|
Property and equipment,
net |
|
1,061,163 |
|
|
|
1,149,806 |
|
Goodwill |
|
2,708,310 |
|
|
|
2,760,813 |
|
Intangible assets, net |
|
473,164 |
|
|
|
537,703 |
|
Long-term investments |
|
25,649 |
|
|
|
20,406 |
|
Other non-current assets |
|
187,357 |
|
|
|
193,381 |
|
Total assets |
$ |
6,718,520 |
|
|
$ |
6,691,903 |
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
Current liabilities: |
|
|
|
Accounts payable and accrued liabilities |
$ |
579,066 |
|
|
$ |
433,164 |
|
Other current liabilities |
|
92,876 |
|
|
|
122,599 |
|
Total current liabilities |
|
671,942 |
|
|
|
555,763 |
|
|
|
|
|
Long-term debt |
|
2,048,585 |
|
|
|
2,048,073 |
|
Other long-term
liabilities |
|
180,807 |
|
|
|
185,273 |
|
Total liabilities |
|
2,901,334 |
|
|
|
2,789,109 |
|
|
|
|
|
Stockholders’ equity |
|
3,817,186 |
|
|
|
3,902,794 |
|
Total liabilities and stockholders’ equity |
$ |
6,718,520 |
|
|
$ |
6,691,903 |
|
|
At Qorvo®Doug DeLietoVP, Investor Relations1.336.678.7968
Qorvo (NASDAQ:QRVO)
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