To: Johnny Canuck who wrote (67575 ) 11/4/2025 2:11:01 AM From: Johnny Canuck Respond to Qorvo Inc (QRVO) Q2 2026 Earnings Call Highlights: Strong Revenue Performance Amid Strategic ...GuruFocus .Revenue: $1.059 billion for fiscal second quarter.Non-GAAP Gross Margin: 49.7%.Non-GAAP Diluted Earnings Per Share (EPS): $2.22.Largest Customer Revenue Contribution: Approximately 55% of total revenue.Cash and Equivalents: Approximately $1.1 billion.Long-term Debt: Approximately $1.5 billion with no near-term maturities.Net Inventory Balance: $605 million, a sequential reduction of $33 million and a year-over-year decrease of $89 million.Operating Cash Flow: Approximately $84 million.Capital Expenditures: $42 million.Free Cash Flow: $42 million.Fiscal Q3 Revenue Guidance: $985 million, plus or minus $50 million.Fiscal Q3 Non-GAAP Gross Margin Guidance: Between 47% and 49%.Fiscal Q3 Non-GAAP Diluted EPS Guidance: $1.85, plus or minus $0.20.Non-GAAP Operating Expenses for December Quarter: Between $255 million and $260 million.Non-GAAP Tax Rate for Fiscal '26: Approximately 15%.full earnings call transcript .Qorvo Inc ( NASDAQ:QRVO ) delivered solid operating performance with fiscal second quarter revenue of $1.059 billion, exceeding guidance. The company is restructuring its CSG to focus on top opportunities, expected to reduce operating expenses by approximately $70 million annually in fiscal 2027. Qorvo Inc ( NASDAQ:QRVO ) is benefiting from strong unit volumes and greater than 10% year-over-year content growth at its largest customer. The company is seeing double-digit year-over-year growth in defense and aerospace markets, driven by new platforms and increased US and allied defense spending. Qorvo Inc ( NASDAQ:QRVO ) is a leading supplier in the transition to DOCSIS 4.0, benefiting from strong demand for broadband amplifiers. Qorvo Inc ( NASDAQ:QRVO ) is exiting the lower-margin Android market, resulting in a $200 million revenue decline this fiscal year and next. The company is experiencing a sequential revenue decline in the Android ecosystem, particularly in China. Qorvo Inc ( NASDAQ:QRVO ) anticipates a normal seasonal decline at its largest customer heading into the December quarter. The company is facing challenges with lower content in its largest Android customer's first half flagship ramp next year. Qorvo Inc ( NASDAQ:QRVO ) is undergoing significant restructuring, including the closure of facilities and transitioning production to external partners, which may impact operations. Q : It seems like you're now assuming a $200 million headwind from exiting the low end of the China Android market. Could you address why that is the case for this year and next year? A : David Fullwood, Senior VP of Sales & Marketing : The $200 million decline is more weighted towards the back half of the year and into March due to factors like lower content in our largest Android customer's first half flagship ramp next year and the timing of last year's models ramping down without replacement.Q : How would you rank order the December quarter outlook across HPA, CSG, and ACG? A : Grant Brown, Chief Financial Officer : We expect our D&A business to increase quarter-over-quarter due to seasonal customer order patterns. HPA was up 25% year-over-year last quarter, and we see strong growth in infrastructure markets, particularly with DOCSIS 4.0 and base station products expanding into new markets like drones and direct-to-cell satellites.Q : What should we think with regard to March quarter seasonality, especially with the Android decline? A : Grant Brown, Chief Financial Officer : We are not guiding Q4 or the full year yet, but we are mindful of typical seasonality with our largest customer ramping down in March and June. We are executing on our strategy to focus on premium flagship tiers, which is reflected in our improving gross margin profile.Q : What are the puts and takes we should think about gross margins next year? A : Grant Brown, Chief Financial Officer : Business mix will be helpful as HPA and defense grow as a percentage of our top line. Product mix within ACG, especially with our exit from low-tier Android, will also help. Factory actions, such as the closure of Costa Rica and transfer of SAW capacity, along with standard cost reduction efforts, will contribute positively.Q : Can you provide an update on your progress with your biggest customer on the mid- to high-band pad? A : Robert Bruggeworth, President & CEO : We can't comment on specifics regarding our largest customer, but we are proud of the team's execution and ask for patience as developments unfold.Q : How should we think about your Android and China exposure post exiting the lower tier Android? A : Grant Brown, Chief Financial Officer : We are focusing on premium and flagship tiers of Android, which require premium performing parts. We feel well-positioned and will continue to support our Android customers while exiting less attractive areas.Q : Are there any cyclical effects in the HPA business outside of normal secular growth? A : Philip Chesley, Senior VP, President - High Performance Analog : Channel inventory is healthy, with more expedite requests than pushouts. We see strong bookings and backlog in power management, particularly in data center solid-state drives.Q : Can you provide color on your guidance by segment expectations heading into the December quarter? A : Grant Brown, Chief Financial Officer : We don't guide by segment, but we are seeing strong performance across our segments, particularly in HPA and infrastructure markets.full earnings call transcript .
