Qorvo, Inc. Q1 FY2026 earnings call

• Strategic Segments: ACG leverages cellular portfolio with durable content; HPA invests in defense/aerospace and power management; CSG supports Wi-Fi advancements and expands ultra-wideband.
• Market Highlights:
  • Automotive: Ultra-wideband enables various use cases, secured design wins and tags for OEMs.
  • Consumer: Wi-Fi 7 design win in AR glasses, supplying Wi-Fi 6/7 FEMs.
  • Defense & Aerospace: Sales funnel increased ~$2B to over $7B, introduced S-band switch filter banks and GaN-based K-band power amplifier.
  • Industrial & Enterprise: Ultra-wideband enabled enterprise networking applications, Wi-Fi 7 front-end and filtering solutions.
  • Infrastructure: Strong momentum in DOCSIS 4.0, released GaN-based power doubler amplifiers, sampled base station solutions.
  • Mobile: Investing in content opportunity at largest customer, secured Wi-Fi 7 design wins, supported smartphone model ramps.
• Operational Actions: Closed Costa Rica site, decided to close North Carolina wafer fab, transferring SAW filter production to Texas, exiting margin-dilutive businesses.

Advanced Cellular Group (ACG): Largest customer has durable multiyear content opportunity with envelope tracking PMIC. Android revenue declined 18% YOY to ~$240M in Q1, China-based Android revenue down 29% YOY to ~$100M. High Performance Analog (HPA): Growth in defense and aerospace (largest market by revenue, expects durable growth) and power management (diversifying across markets). Connectivity & Sensors Group (CSG): Supported Wi-Fi access points and smartphones with Wi-Fi 7 front ends, aligned with chipset providers for Wi-Fi 8. Leveraging ultra-wideband and Matter for new use cases. Ultra-wideband has over $2B of qualified opportunities. Sequential growth in CSG was impacted by an automotive customer delaying a program ramp.

Fiscal Q2 2026: Revenue $1.025B ±$50M, non-GAAP gross margin 48%-50%, non-GAAP diluted EPS $2 ±$0.25. Full Year 2026: Not updating full year guidance yet, but ACG expected to decline single-digit, CSG low single-digit growth, HPA strong double-digit growth in defense/aerospace, infrastructure rebound.

• Tariff Impact: Limited inventory buffering at some customers, impact on battery-operated power tools production.
• Macro Uncertainty: Impact on consumer and industrial markets due to trade policy and tariff dynamics.
• Program Delays: CSG automotive program ramp delayed to fiscal 2027.

Q: Seasonality and disconnect in ACG growth?

A: December seasonality, ACG expected single-digit decline, ~2/3 of Android business decline in second half of fiscal 2025.

Q: Gross margin improvement drivers?

A: Cost reductions, factory actions, business mix shift to margin-accretive areas.

Q: Defense business and M&A potential?

A: Defense business growing with increased design opportunities, actively looking for M&A in defense space.

Q: Tariff buffering and price pressure?

A: Limited buffering, primarily in battery-operated power tools, no significant price pressure in other areas.

Q: CSG delay and modeling?

A: CSG growth pushed to fiscal 2027 due to automotive program delay, impacts low single-digit growth.

Q: Edge AI implications for RF?

A: More uplink MIMO and power class 2 needed, aligns with 5G advanced trends.

Q: Android business exit and Samsung?

A: Exiting low-margin Android 5G, Samsung business has strong content in flagship, benefit from internal chipset success.