Qorvo, Inc. Q4 FY2025 earnings call

• Qorvo had a strong March quarter with achievements in all operating segments. In ACG, supported a critical new phone launch with an envelope tracking solution. HPA had record revenue in defense and aerospace. CSG increased Ultra-Wideband sales funnel. - Strategic initiatives include improving performance through actions like shifting away from legacy Android programs, scaling high-value products, consolidating manufacturing footprint, and closing the Costa Rica facility. - Product launches and wins across various markets: in automotive, sampled an Ultra-Wideband programmable SOC; in consumer, had production ramp of power management IC for wearable and supplied battery management SOC for power tools; in defense and aerospace, achieved record quarter and fiscal year in DNA revenue with a sales funnel over $5 billion; in industrial and enterprise, saw growth in data center power management ICs and began sampling next-generation motor drive SoC; in infrastructure, base station inventories stabilized and secured new design wins in DOCSIS 4.0; in mobile, expanded opportunity at largest customer with envelope tracking power management solution and secured design wins for upcoming launches.

Qorvo delivered a strong March quarter with notable achievements in each operating segment. In Advanced Cellular Group (ACG), it supported a critical new phone launch by the largest customer with an envelope tracking Power Management solution. High Performance Analog (HPA) posted a record revenue quarter in defense and aerospace business. Connectivity and Sensors Group (CSG) continued to increase its Ultra-Wideband sales funnel, with the automotive Ultra-Wideband sales funnel growing more than $500 million over 12 months to exceed $2 billion. For fiscal year 2025, both CSG and HPA grew revenue double digits. However, specific absolute revenue figures and contribution percentages were not detailed in absolute terms beyond these growth highlights.

• For the June quarter, revenue is expected to be approximately $775 million plus or minus $25 million, non-GAAP gross margin between 42% and 44%, and non-GAAP diluted EPS between $0.50 and $0.75. - Non-GAAP operating expenses in the June quarter are projected to be approximately $250 million. - Non-operating expense is expected to be between $10 and $12 million. - Non-GAAP tax rate for fiscal '26 is expected to be between 18% and 19%, though impact of global minimum tax and international tax policy changes is uncertain.

• Uncertainty surrounding tariffs and broader macroeconomic conditions, with potential direct tariff impact rising to high single-digit millions per quarter if 90-day pause isn't extended, exemptions expire, and retaliatory tariffs become permanent. - Impact of global minimum tax legislation for U.S.-based companies under new administration and changes to international tax policy remain uncertain.

Q: Thomas O'Malley from Barclays asked about content growth with the largest smartphone customer, pricing headwinds, and Android cadence.

A: Bob Bruggeworth and others responded, discussing content growth from various buckets, sole sourcing of ET solution, and expected decline in Android year over year but uptick in the current quarter.

Q: Harsh Kumar from Piper Sandler inquired about ET solution sharing, content increase drivers, and tariffs impact on largest customers.

A: Bob Bruggeworth and others explained sole sourcing of ET solution, content increase from multiple buckets, and that tariff impact is small and managed with mitigation measures.

Q: Chris Caso from Wolf Research asked about tariff assumptions and fiscal '26 guidance.

A: Grant Brown detailed tariff assumptions, how they're managed, and that fiscal '26 guidance is based on substantive business changes and secular trends.

Q: Karl Ackerman from BNP Paribas asked about inventory working through, tariffs impact on China-based demand, and margin associated with China-based demand.

A: Grant Brown responded on inventory progress and no noticeable tariff impact.

Q: Srini Pajjuri from Raymond James asked about exiting low-end Android headwinds and DNA business details.

A: Bob Bruggeworth and Philip Chesley addressed exit progress and detailed DNA business drivers, design win funnel, and product categories.

Q: Edward Snyder from Charter Equity Research asked about revenue flatness, content gains, and tariffs impact on module assembly.

A: Frank Stewart and Bob Bruggeworth responded on content gains, difficulty in predicting future architectures, and module assembly shifts.

Q: Gary Mobley from Loop Capital asked about HPA and CSG growth in fiscal '26 and cyclicality.

A: Bob Bruggeworth and Eric Creviston discussed growth outlook and CSG business drivers.

Q: Unidentified Analyst from Loop Capital asked about tariff impact mitigation and demand pull-in related to guidance.

A: Grant Brown and Dave Fullwood explained mitigation strategies and that demand pull-in due to tariffs is modest and not meaningful in dollars.